News
More tax hikes in upcoming Budget
View(s):- Treasury says extra money needed to fund welfare and relief programmes
By Damith Wickramasekara
They include Rs 466 million for social security, Rs 124 million for welfare assistance, Rs 16 million for welfare programmes for education and Rs 10 million for health and nutrition programmes.
The Government will also have to spend Rs 1.1 trillion to pay the salaries of public officials and a further Rs 3.2 billion for their pensions.
The Treasury expects the Inland Revenue Department to collect more than Rs. 1 trillion in tax revenue next year on the basis of newly increased taxes. Additional tax revenue is also expected from Sri Lanka Customs, the Excise Department and the Board of Investment (BOI).
The vehicle import ban will continue next year as well. The Government will also have to find ways to recover the tax revenue lost from this decision.
The Government gazetted the Inland Revenue (Amendment) Bill last week to bring in new taxes to boost depleted State coffers.
It was a follow-up to revenue proposals announced in the August interim Budget unveiled by President Ranil Wickremesinghe, who is also Finance Minister.
A number of taxes were revised. The Inland Revenue Department was further strengthened as the Government’s primary tax collector. Tax-free allowances were slashed and a broadening of the tax base is envisaged. Anyone with gross monthly earnings of Rs 100,000 or above was made liable for income tax from October 1 this year.
Income tax payable by a person for the year of assessment beginning from April 01, 2022, is calculated separately for two periods of the year of assessment, as the first six months and the second six months.
As such, the taxable sum from the income of a person for the first six months from April 01, 2022, to September 30, 2022, begins with people earning an annual income exceeding Rs. 1.5 million.
The capital gain tax rate applicable on realisation of investment assets by the companies has gone up from 10 percent to 30 percent.
Also amended were the Value Added Tax Act No. 14 of 2002, the Telecommunications Levy Act No. 21 of 2011, Betting and the Gaming Levy Act No. 40 of 1988, and the Fiscal Management Act No. 3 of 2003 in addition to the Inland Revenue Act No. 24 of 2017. All tariffs have gone up.
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