National Tariff Policy has officially come into effect after Sri Lanka’s Parliament approved a series of resolutions and orders aimed at liberalising trade, simplifying import duties and strengthening the country’s export competitiveness.
National Tariff Policy ushers in tariff reforms to boost Sri Lanka exports
Parliament approved a resolution under the Customs Ordinance (Chapter 235) published in Extraordinary Gazette No. 2478/03, together with two orders issued under the Sri Lanka Export Development Act through Extraordinary Gazette Nos. 2478/04 and 2479/38. The measures complete a major overhaul of Sri Lanka’s tariff structure as part of the Government’s broader trade liberalization agenda.
Deputy Minister of Economic Development Nishantha Jayaweera told Parliament that the reforms have already generated positive fiscal results. Customs import duty revenue increased to Rs. 39 billion between 1 April and 15 May 2026, compared with Rs. 24 billion during the corresponding period in 2025.
The increase follows the implementation of the National Tariff Policy on 1 April 2026, replacing Sri Lanka’s previous three-tier tariff structure of 0%, 15% and 20% with a simplified four-tier framework comprising 0%, 10%, 20% and 30% duty bands.
The revised tariff structure has been aligned with the United Nations Broad Economic Categories (Revision 5) and applies to 8,225 Harmonized System (HS) Codes, creating a more transparent and internationally aligned import duty regime.
Under the new system, 3,056 HS Codes covering essential goods, medicines and machinery attract a 0% duty rate. Another 406 codes, primarily basic industrial and intermediate goods, are subject to a 10% tariff, while 2,195 codes fall within the 20% category.
A further 582 HS Codes, covering luxury goods and products that can be manufactured domestically, are taxed at 30%. Mixed tariff rates apply to 411 codes, while 875 codes subject to specific duties remain unchanged.
Jayaweera said one of the Government’s primary objectives is to simplify Sri Lanka’s tax structure by reducing complexity and eliminating para-tariffs that have historically created barriers to international trade agreements.
Alongside the tariff reforms, the Government has launched a phased programme to remove CESS duties over four stages, with the objective of eliminating para-tariffs entirely by 2029.
While 37 HS Codes will be subject to newly introduced CESS duties, 17 HS Codes covering edible oils will see CESS removed immediately.
The phase-out schedule differs across product categories. CESS will be abolished entirely in 2026 for 46 economic-rate HS Codes, while 693 intermediate and capital goods codes will receive a 50% reduction in 2026, followed by further reductions of 25% in both 2027 and 2028.
For another 107 specific HS Codes, CESS will decline by 25% in 2027, 25% in 2028 and 50% in 2029. In addition, CESS on 265 textile-related codes will be removed during 2026 alongside the introduction of a new import VAT, while 1,523 consumer goods will see the levy phased out completely by 2029.
According to Jayaweera, removing CESS on intermediate goods will lower production costs by reducing the price of imported raw materials, thereby improving the competitiveness of local manufacturers.
He said the reforms are expected to create more favourable conditions for Sri Lanka exports, enabling domestic businesses to access international markets more competitively while supporting long-term export-led economic growth.
The National Tariff Policy represents one of Sri Lanka’s most comprehensive trade reforms in recent years, with authorities expecting the simplified tariff structure to improve transparency, strengthen investor confidence and better position the country for future international trade agreements.