Thursday Mar 05, 2026
Thursday Mar 05, 2026
Thursday, 5 March 2026 05:25 - - {{hitsCtrl.values.hits}}
In a major trade policy shift aimed at boosting export competitiveness, the Cabinet of Ministers on Tuesday approved a phased removal of the cess imposed on 2,634 identified Combined Classification Codes over a four-year period from 2026 to 2029.
Addressing the weekly post-Cabinet meeting media briefing yesterday, Cabinet Spokesman and Minister Dr. Nalinda Jayatissa noted that higher import costs have eroded the global competitiveness of Sri Lankan products and constrained export-led growth.
He said that under the reform plan, tariffs will be gradually removed at rates ranging from 25% and 50% up to 100%, depending on the product category.
Giving a breakdown of the phased schedule Dr. Jayatissa said: “697 intermediate goods will see cess removed between 2026 and 2028, a total of 107 sensitive intermediate goods used by local industries will be phased out by 2027–2028, while 265 textile-related goods will have cess removed this year and 46 goods with a marginal cess rate below 5% will also see immediate removal in 2026.”
The move is expected to ease cost pressures on exporters, improve supply chain efficiency, and create a more level playing field across industries as Sri Lanka pivots toward a more open and competitive trade framework.
He said the phased withdrawal of cess is therefore intended to lower production costs, promote industrial development and value addition, and align Sri Lanka’s trade regime with internationally accepted practices and World Trade Organisation (WTO) policies.
The proposal was jointly submitted by President Anura Kumara Dissanayake, in his capacity as Finance, Planning and Economic Development Minister and Industry and Entrepreneurship Development Minister Sunil Handunneththi.
The decision marks a decisive move away from the long-standing practice of imposing para tariffs and non-customs import duties, including excise-based levies introduced to protect selected domestic industries and generate revenue. While these measures offered temporary safeguards, they have also raised production costs, particularly for export-oriented sectors dependent on imported intermediate and input goods.
Cess is a special levy imposed on select imports and exports under the Export Development Act No. 40 of 1979, often used to discourage non-essential imports, protect local industries, and fund export development. It is calculated as a percentage (ranging from 1% to 35%) or a specific unit rate on goods, often resulting in the highest amount.
