Treasury warns SOEs against paying PAYE tax of employees
View(s):Some Sri Lankan state-owned enterprises (SOEs) have been guilty of paying the PAYE (Pay As You Earn) tax of its employees from company funds – without deducting it from the workers’ wages. The issue was raised at several meetings of the Committee on Public Enterprises (COPE) and instructions were issued by the committee for SOEs to desist from this practice, according to a circular issued by the Treasury Secretary R.H.S. Samaratunga to SOEs, ministries and government departments. The April 29 circular states that public officers including employees of SOEs must pay PAYE through deductions in their wages.
“However it is noticed that some SOEs are still bearing PAYE tax expenditures of their employees without deducting PAYE tax from personal emoluments of employees,” the circular said. It advised the various authorities to strictly adhere to the instructions for PAYE tax to be paid by employees of SOEs. “PAYE tax should be deducted from tax liable employees’ earnings as per the relevant regulations of the Inland Revenue Department (IRD). The Board of Directors and Senior Management of SOEs should ensure that PAYE tax is deducted and remitted to the IRD,” the circular no. PED 03/2016, said.