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Sri Lanka expects to pass income tax law in August

Jul 21, 2017 12:35 PM GMT+0530 | 0 Comment(s)

ECONOMYNEXT - Sri Lanka is expecting the parliament to vote on a new income tax law that will expand the tax net by August 2017, which applies from the 2018 fiscal year, Finance Minister Mangala Samaraweera said.

The finance ministry is currently in talks with industry groups and other stakeholders, whose views, if reasonable, will be incorporated at the committee stage or third reading in parliament.

"There are cases filed in the Supreme Court, and we will incorporate changes that are suggested," Samaraweera said.

State Minister for Finance Eran Wickramaratne said up to six months is given in the new bills to file returns, and taxpayers and Inland Revenue officials had time till the second half of 2018 to become familiar with the law.

The intention of the bill is to remove exemptions as a policy and get everyone into the tax net, he said.

Doctors engaging in private practice and lawyers were among those who avoided paying taxes. State doctors, politicians and other state workers also do not pay taxes on vehicles in Sri Lanka at the moment, which would be unaffected by the income tax law.

Religious charities who do business may have to pay tax, but temples that have had commercial activities from ancient times would be looked into, Samaraweera said.

Under the old income tax law, money earned from foreign employment was tax free. Samaraweera said he expected the same provisions to apply in the new law, but he would check.

The overall idea was to increase direct taxes (taxes on investible profits and employment income) up to 40 percent of total revenues from the current 20 percent, Samaraweera said.

Indirect taxes (value-added tax and import duties) now make up 80 percent of revenue.

Samaraweera said he was of the personal opinion that everyone over the age of 18 should have a taxpayer number regardless of whether they have to pay tax or not. (Colombo/July21/2017)
 


 

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