Sri Lanka to Eliminate Para-Tariffs and Introduce Simplified Four-Tier Import Framework

Sri Lanka confirmed a major overhaul of its import tax structure in 2026, replacing the complex web of supplementary levies, including the Cess charge and the Ports and Airports Development Levy, with a streamlined four-tier tariff band. The reform follows sustained pressure from the World Bank and trading partners who have long argued that the existing para-tariff system adds cost and unpredictability to trade.

The 2026 budget also directed the appointment of an expert committee to review all existing free trade agreements and explore new ones, particularly long-stalled negotiations with India and China. The Federation of Chambers of Commerce welcomed the reform, noting that a more transparent tariff framework is critical to attracting foreign investment and developing regional supply chain links. Implementation is scheduled to take effect progressively during 2026 in coordination with the Ministry of Trade and the Customs Department.