President Anura Kumara Dissanayake pledged to amend the current PAYE tax structure in the upcoming 2025 Budget, providing much-anticipated relief for taxpayers.

Speaking on Sirasa’s Satana political talk show yesterday (7 November), the President outlined the economic challenges tied to the IMF agreements, including the goal of raising revenue to 15% of GDP from the current 13.8%. "The IMF expects a 15% revenue from GDP, and we’re currently at 13.8%. There are two options: exiting the program or remaining in it and absorbing its positive elements. However, our economy is still too fragile to bear the shock of an exit," Dissanayake explained.

He further clarified that achieving the 15% revenue target will require strategic adjustments. "As we prepare the budget, we must consider increasing revenue. Current revenue, which includes PAYE tax, is at 13.5%. If we reduce the PAYE tax, we must find alternative ways to compensate for the shortfall. We aim to provide PAYE tax relief and reduce VAT on certain essential goods," he added.

Dissanayake stated that the 2025 Budget would be presented in late February or mid-March, following a Vote on Account in December to cover the first three months of the year. "So, the public can expect PAYE tax relief beginning with the March salary. For those on lower salary scales, the relief will be more significant, while higher earners will see comparatively smaller reductions," he said.