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Friday July 12th, 2024

Sri Lanka to bring in 14 previously untaxed sectors into direct tax net: state minister

ECONOMYNEXT — Sri Lanka plans to tax 14 new previously untaxed sectors including large-scale private tuition classes and private medical services in a bid to increase direct taxation, State Minister of Finance Ranjith Siyambalapitiya said.

He told reporters on Monday July 08 that private schools and private engineering and surveyor services will also be taxed.

The Inland Revenue Department (IRD) has studied the income of persons engaged in the 14 sectors, said Siyambalapitiya.

“It was by paying attention to such sectors that we were able to increase state revenue from 8.3 percent of GDP to over 11 percent in a short time and bring revenue and expenditure to some balance.

“A primary surplus was possible because all of those sectors were thoroughly looked into and revenues collected. We must continue this,” he said.

It was for this reason that the IRD’s Revenue Administration Management Information System (RAMIS) was being deployed, the state minister said.

“Through that we can get data on not just income but the expenditure of such institutes also. Globally that’s how proper calculation of income and expenditure is calculated. We’re moving forward step by step,” he said.

“We have taken into account 14 sectors that have not been considered,” he added.

The government plans to increase the share of direct taxation to 70 percent from the current 60 percent, he said.

“Why are we trying to increase direct taxes? To reduce the burden of indirect tax on the public. In 2022, 80 percent of tax revenue was indirect, while direct was only 20. This meant that 80 percent of the state revenue burden fell on everyone equally, from the richest person to the beggar on the street. But now this has changed to 70 and 30 percent. In two years, we plan to change this to 60, 40 as in developed countries. This is to tax people who are able to pay direct taxes, and to reduce indirect tax especially value added tax (VAT),” he said.

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Sri Lanka appoints new Attorney General

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has appointed K A Parinda Ranasinghe PC as Attorney General.

He was appointed in terms of Article 61E (b) of the Constitution of Sri Lanka, the president’s media division said.

The new AG received the appointment from President Wickremesinghe at the Presidential Secretariat on Friday.

He fills the post after the retirement of former Attorney General Sanjay Rajaratnam. (Colombo/Jul12/2024)

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Sri Lanka rupee closes stronger at 301.70/302.00 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed stronger at 301.70/302.00 to the US dollar on Friday, from 302.80/303.00 to the US dollar on Thursday, dealers said, while bond yields were up.

A bond maturing on 15.12.2026 closed at 10.90/11.00 percent, up from 10.85/95 percent.

A bond maturing on 15.12.2027 closed at 11.75/80 percent, up from 11.80/88 percent.

A bond maturing on 01.05.2028 closed at 11.90/12.00 percent.

A bond maturing on 15.09.2029 closed at 12.10/30 percent, up from 12.15/25 percent. (Colombo/Jul12/2024)

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Sri Lanka stocks close up, muted activity

ECONOMYNEXT – The Colombo Stock Exchange closed up on Friday, data on its site showed.

The broader All Share Index closed up 0.35 percent, or 41.71 points, at 11,843; while the more liquid S&P SL20 Index closed up 0.56 percent, or 19.20 points, at 3,454.

Turnover was low at 653 million.

“The market picked up a bit from yesterday but it’s still below the psychological 12,000 mark,” Softlogic Stockbrokers said.

“Local retail participation drove the market predominantly.”

John Keells Holdings Plc brought in Rs109mn to the turnover, and the share closed flat at 194.50.

Melstacorp Plc contributed in Rs104mn to the turnover, and the share closed flat at 85.00.

Sentiment around the banking counters was mostly negative. Sampath Bank Plc closed down at 77.00, closed flat at 101.25, and Hatton National Bank Plc closed flat at 195.25.

The top contributors to the ASPI were Commercial Bank of Ceylon Plc (up at 103.50), Bukit Darah Plc (up at 397.00), and Hayleys Plc (up at 101.00).

Foreign participation remained low as well. There was a higher net foreign outflow of 101 million.

“Foreign selling was seen on John Keells Holdings, and banking counters; Hatton National Bank Plc (down at 195.00), Pan Asia Banking Corporation Plc (down at 20.70), and Commercial Bank of Ceylon Plc.

There was selective foreing interest on the diversified financials sector, particularly in companies that had vehicle leasing portfolios. “We think this might be due to the news of the vehicle import ban possibly ending.”

LOLC Holdings Plc closed up at 440.50, People’s Leasing and Finance Plc closed up at 12.20.

Softlogic Holdings Plc which announced the date of its rights issue, closed up at 8.50. (Colombo/Jul12/2024)

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