Sri Lanka to slash taxes on professional services, remittances, hike VAT threshold
ECONOMYNEXT – Sri Lanka will slash income taxes on professional services to 14 percent, the value added tax threshold will be doubled for small traders and wholesalers, the Finance Ministry said in a statement.
A tax rate of 14 percent tax rate for agriculture businesses will be made available to individuals engaged in farming, bringing their rate down from 24 percent.
A concessionary tax rate of 14 percent on SME categories will be "extended to include individuals including those providing professional services," the statement said, brining the rate down from 24 percent.
The threshold for value added tax will be raised to 24 million rupees from 12 million for small businesses.
For wholesale and retail, the VAT threshold will be raised from 50 to 100 million rupees.
Withholding tax on interest on deposits has been lifted.
Remittances will be exempted from tax.
A telecom tax would be cut from 25 percent to 15 percent.
"The necessary Gazettes for the aforementioned tax related proposals will be issued today and Cabinet approval is sought to amend the necessary tax laws," the Finance Ministry statement said.
In Sri Lanka though the parliamnet is in theory in control of finances, some import taxes are changed through midnight gazette by decree. The statement came as Sri Lanka is in the grip of a political crisis after President Maithripala Sirisena appointed Mahinda Rajapaksa as Prime Minister and Finance Minister and the parliament is suspended. (COLOMBO, 01 November, 2018)