ECONOMYNEXT – Sri Lanka’s performers, artistes of all kinds will get a 500,000 tax free allowance for net earnings after deducting expenses, when treated as a sole proprietorship, the finance ministry said.
Sri Lanka had a complex system of tax breaks for large and small firms as well as different professions earlier.
The finance ministry said everyone will be treated equally under the new law and there will be no class or other basis, but only the earning capacity.
With the first 500,000 rupees tax free, the next 600,000 rupees will be taxed at 4 percent.
Under the new law, the aim is to simply taxes, the finance ministry said. Sri Lanka is also trying to boost direct taxes (taxes taken directly by the state from earnings before citizens get a chance to spend it) as opposed to indirect taxes (when citizens spend money).
In the existing income tax law which ends in April 2018 ‘professionals’ were taxed separately.
The new tax law will help reduce the build-up of social inequities, the finance ministry said.
Sri Lanka has a bloated state with a large public sector and loss making state enterprises.
The law still discriminates between the elected ruling class (tax free), state workers (tax slashed) when vehicles are taxed, with ordinary citizens paying exorbitant rates of tax and helping finance roads and repay debt. (Colombo/Sept/24/2017)