President Anura Kumara Dissanayake has announced that the Pay-As-You-Earn (PAYE) tax will be revised through the 2027 Budget, which is scheduled to be presented to Parliament next week.

He made the announcement while addressing the National Trade Union Convention being held today.

Speaking at the event, the President highlighted that the private sector makes the largest contribution to the country's economy, noting that the government has given special consideration to the economic well-being of employees in the sector.

He stated that the government had taken steps to increase basic salaries following discussions with private-sector institutions and business associations.

The President further noted that attention had also been given to employees' additional allowances, as well as the PAYE tax deductions imposed on higher-income earners.

He explained that the existing PAYE tax threshold had previously been increased from Rs. 100,000 to Rs. 150,000, adding that the government expects to raise the threshold further through the upcoming Budget to provide additional tax relief.

Addressing the gathering, President Dissanayake stated:

"It is the private sector that makes the largest contribution to our economy. We held discussions with private-sector institutions and business associations, following which basic salaries were increased. However, the salary increase was not at a particularly significant level. We also considered employees' additional allowances and the PAYE tax deductions imposed on higher-income earners.”

He stated that the PAYE tax threshold had been increased from Rs. 100,000 to Rs. 150,000 and that the government expects to raise it further through the upcoming Budget, providing additional tax relief to employees.

"Our government has a responsibility to protect all sectors, including the public, semi-government, plantation and private sectors, and we are fulfilling that responsibility," he added.