2026 Citizens’ Budget: An Overview
10-Nov-2025.
Presenting the 2026 budget of the National People’s Power government, President Anura Kumara Dissanayake proposed raising the daily wage of plantation workers to 1,750 rupees.
The current minimum daily wage of 1,350 rupees will be increased to 1,550 rupees from January next year. In addition, the government will provide a daily incentive allowance of 200 rupees for reporting to work. An allocation of 5,000 million rupees has been set aside for this purpose.
Regarding the salaries of public servants, the President announced that 110 billion rupees has been allocated for implementing the second phase of the salary revisions initiated in 2025. These revised salaries will be paid to all government employees from January next year.
Pensions for those who retired before 2020 will be revised based on the 2019 salary structure. The revised pensions will be paid from July next year, for which 20,000 million rupees has already been allocated.
The monthly Mahapola scholarship and student assistance allowances for university students will be increased by 2,500 rupees. Accordingly, the Mahapola allowance has been raised to 10,000 rupees. The President delivered the budget speech for approximately four and a half hours.
Key budget proposals for next year include:
Allocation of 1,700 million rupees for agricultural development and 3,500 million rupees for developing tourism activities linked to aquatic resources.
A 500 million rupee allocation for training professionals in the tourism sector.
Expansion of domestic aviation services and commencement of expansion work at Katunayake Airport next year.
Introduction of a state commercial management act.
Biannual publication of tax exemption reports on the Finance Ministry website to ensure transparency.
Allocation of 1,000 million rupees for improving services in investment zones.
Provision of 100 million rupees for centralised digital infrastructure, including land information.
Introduction of a residential visa scheme for foreign investors.
Development of a new framework similar to international trade agreements.
Allocation of 5,900 million rupees in loans for SMEs.
Another 1,000 million rupees for industrial development.
Over 25,500 million rupees in investment for developing the digital economy in 2026, establishment of a Digital Economy Council, and launch of the digital ID card in March 2026.
Creation of a national AI data centre.
Internet service vouchers for children of Aswesuma beneficiary families.
A five-year tax exemption for investments in digital technology towers.
Allocation of 6,500 million rupees for the Clean Sri Lanka programme.
Wages and social welfare:
Plantation workers’ daily wage: to increase from 1,350 to 1,550 rupees in January 2026, plus a 200-rupee daily attendance allowance (5,000 million rupee allocation).
A 5,000-rupee monthly allowance for low-income disabled children based on medical recommendation, with 50 million rupees allocated.
Education and health:
11,000 million rupees allocated for developing medical faculties at Sabaragamuwa, Moratuwa, Uva Wellassa, Oluvil and Eastern Universities.
11,500 million rupees allocated for improving facilities and research activities in universities and higher education institutes.
Mahapola allowance for university students raised to 10,000 rupees; student assistance allowance increased to 9,000 rupees.
31,000 million rupees allocated to upgrade 82 base hospitals within five years.
200 million rupees for the initial phase of constructing a 16-storey national cardiac treatment centre (total cost: 12,000 million).
4.2 billion rupees for the Suwaseriya ambulance service.
2,000 million rupees for anti-narcotics enforcement operations.
Vocational training and agriculture:
Teacher trainees at National Colleges of Education to receive an additional 2,500 rupees.
8,000 million rupees allocated for upgrading vocational training centres.
A national dairy production programme formulated to meet 75 percent of domestic milk demand by 2030.
1,000 million rupees allocated for feasibility and initial work under the small and medium-scale livestock development programme.
350 million rupees allocated for upgrading the Valachchenai fisheries harbour.
Infrastructure and housing:
66,150 million rupees allocated for the Kadawatha–Meerigama section of the central expressway.
An additional 1,000 million rupees for the nationwide road safety programme.
A city plan for Nuwara Eliya to relieve traffic congestion; 500 million rupees allocated as an interim measure.
Construction of 27,000 new houses to be completed next year, including ongoing projects.
4,290 million rupees allocated for infrastructure to support 2,000 estate-sector houses built with Indian support.
Employment and public sector reforms:
Approval granted to recruit 75,000 new personnel into the public service.
110 billion rupees allocated for phase two of the 2025 public sector salary revisions, effective from January 2026.
Pensions of pre-2020 retirees to be revised based on 2019 salary structure, effective July 2026 (20,000 million allocated).
Loans and taxation:
New concessional loan scheme for public servants: loans up to 5 million rupees, with 4 percent concession on the first 3 million and 2 percent on the remainder; 500 million rupees allocated.
Social Security Contribution Levy to be collected at the point of vehicle import, manufacture or sale, and exempted thereafter; effective April 2026.
Removal of the 100-rupee cess per kg on imported textiles; value-added tax to be imposed instead, effective April 2026.
Removal of special commodity levies on imported coconut oil and palm oil, replaced with VAT and standard taxes.
Increase in the festival advance for public servants from 10,000 to 15,000 rupees.
Increase in allocation for 2,500 war-affected households in the North and East from 3,850 million to 5,000 million rupees.
3,600 million rupees allocated for purchase of 600 buses.
1,000 million rupees allocated for upgrading Hingurakgoda, Sigiriya and Trincomalee domestic airports and expanding operations at Jaffna Airport.
Direct-to-indirect tax ratio revised to 60:40.
Government revenue expected to exceed 15.3 percent of GDP by 2026, with a long-term goal of 20 percent.
Government aims to reduce debt-to-GDP ratio below 90 percent by 2032.
Economic growth projected at 7 percent.
SriLankan Airlines’ USD 210 million debt to be restructured.
New modern tax audit framework to take effect for income tax returns filed from January 2026.
Amendments to telecommunications taxation laws proposed.
Integration of taxpayer ERP with revenue administration system to begin after completion of a pilot project.
2,000 million rupees allocated to construct a new Inland Revenue Department headquarters.
