May 11 (TheLedger) - Parliament passed the 2026 Budget late on Friday night after a marathon fourteen-hour session, with 121 members voting in favour and 94 against.
The bill clears the way for new fuel subsidies, a 6% increase in the income tax-free threshold, and a tightened revenue target of LKR 4.8 trillion. Finance Minister K. Karunatilake described the result as a "responsible compromise" between fiscal consolidation and household relief.
Opposition members criticised the absence of inflation-indexing on public sector pensions, with several walking out before the final vote.
What changes immediately
Effective from 1 January 2026, fuel subsidies for three-wheeler operators will be reinstated, and the income tax-free threshold will rise from LKR 1.2 million to LKR 1.27 million per year.
The government has also committed to publishing a quarterly fiscal scorecard from Q1 onwards, a long-standing demand of civil-society groups.
