Sri Lanka cuts import taxes on 3 essential foods, raises levy on sugar

ECONOMYNEXT – Sri Lanka has slashed import taxes on sprats, Maldive fish and dried chillies, while raising the levy on imported sugar by 10 rupees a kilogram, President Anura Kumara Dissanayake said presenting the 2027 budget.

The tax cuts on these foods will take effect from November 13, Dissanayake told parliament on Thursday.

Under the proposals, the Special Commodity Levy on imported sprats will drop from 100 rupees to 10 rupees a kilogram, while the levy on Maldive fish will be cut from 302 rupees to 10 rupees a kilogram.

The Special Commodity Levy on both powdered and whole dried chillies will also be reduced by 50 rupees a kilogram.

“We propose to reduce the Special Commodity Levy to ease the cost-of-living pressure faced by consumers due to rising prices of essential food items,” Dissanayake told parliament.

The government proposed increasing the Special Commodity Levy on imported sugar by 10 rupees a kilogram to help local sugar producers compete on equal terms.

“To protect the local sugar industry and reduce the tax gap with imported sugar, we propose increasing the levy on imported sugar by 10 rupees a kilogram,” he said.

While cutting duties on sprats, Maldive fish and dried chillies reduces tax collection on those staples, budget estimates show the combined Special Commodity Levy revisions will result in a net annual revenue gain of 950 million rupees rather than an overall loss, once the higher tax on imported sugar is factored in.

The budget’s revenue impact summary lists November 2026 as the effective start for the Special Commodity Levy revisions.

The food tax relief comes as consumers have faced renewed price pressures, with annual inflation rising to 8.3 percent by October 2026 following higher fuel costs linked to conflict in West Asia.  (Colombo/Nov12/2026)