Sri Lanka’s primary dealers to be taxed at 28-pct
ECONOMYNEXT – Sri Lanka’s primary dealers in government securities will be taxed at 28 percent under a new income tax law that will go into effect in April 2018, an official said.
Primary dealers in government securities borrow short term money and invest in longer term bonds at higher rates earning and interest differential and capital gains or losses.
Under a new Inland Revenue law capital gains are taxed at 10 percent and interest income at 28 percent for companies.
Thanuja Perera consultant to Sri Lanka’s finance ministry said capital gains for primary dealers are standard business income.
As a result primary dealers will be taxed at 28 percent from next year.
Under current law, primary dealers have not been paying tax on an interpretation of the existing tax law. Primary dealers pay withholding tax on bonds they buy upfront. (Colombo/Sept12/2017)