President Anura Kumara Dissanayake has announced that the government expects to further increase the Pay-As-You-Earn (PAYE) tax threshold through the 2027 Budget, which is scheduled to be presented to Parliament next week.
Addressing the National Trade Union Convention in Colombo today (07), the President said the existing PAYE tax threshold had already been increased from Rs. 100,000 to Rs. 150,000, and the government intends to raise it further to provide additional financial relief to salaried employees.
He said the government recognises the private sector’s significant contribution to the national economy and is giving particular attention to the economic well-being of its employees.
The President noted that discussions had been held with private-sector institutions and business associations, following which measures were taken to increase employees’ basic salaries.
However, he acknowledged that basic salary increases alone were insufficient to provide meaningful financial relief. The government had therefore also considered introducing supplementary allowances.
He further noted that PAYE tax deductions on higher salaries remained a major concern and said a further adjustment to the tax threshold was expected in the upcoming Budget.
President Dissanayake stressed that the government had a responsibility to safeguard the interests and economic security of employees across all sectors, including the state, semi-government, plantation and private sectors.
