The Sri Lankan government has announced significant changes in its 2025 budget, including a substantial increase in casino fees and various taxes aimed at boosting revenue.
Under the new budget provisions, casinos will be subject to an 18 percent levy on their gross collections, a move intended to enhance fiscal contributions from the gaming sector. Additionally, the entrance fee to casinos will rise from $50 to $100 per person, effectively doubling the cost for patrons.
Sri Lanka has seen a growing interest in the gaming industry over the past decade, with several large-scale casino resorts opening in Colombo and other urban areas.
A joint venture between Macau gaming operator Melco Resorts & Entertainment and John Keells Holdings announced an investment of over $1.2 billion in an IR project in the country’s capital (City of Dreams Sri Lanka), making it the largest private investment in the nation. The project is expected to be fully operational in 3Q25.
The government has been keen to regulate and tax this burgeoning sector, which is seen as a potential driver for tourism and economic growth.
The budget also proposes a hike in corporate taxes for the tobacco and alcohol industries, with corporate tax rates potentially reaching 45 percent.
In an effort to further increase revenue, the stand duty on lease contracts will be raised from 1 percent to 2 percent, effective March 1st, 2025. This change will apply to all lease agreements, excluding hire purchase contracts.
A new digital services tax will also be introduced as part of the Value Added Tax (VAT) framework, requiring businesses liable for VAT to operate point-of-sale machines.
The capital gains tax for individuals on investment assets will increase from 10 percent to 15 percent, although exemptions will remain in place for listed shares and residential properties.
