Cabinet approval granted to reduce PAYE Tax

The Cabinet of Ministers has approved a proposal to reduce pay-as-you-earn (PAYE) tax starting next year.

Cabinet Spokesman Minister Bandula Gunawardene said that the proposal will be included in the budget proposals for next year.

Under the proposed changes, the PAYE tax will be adjusted as follows:

1. For an individual earning a monthly income of Rs. 150,000, the current tax of Rs. 3,000 will be reduced by Rs. 500 to Rs. 2,500.
2. An individual with a monthly income of Rs. 300,000, currently taxed Rs. 7,000, will see this amount reduced to Rs. 3,500.
3. The tax for those earning Rs. 450,000 per month, currently at Rs. 76,000, will be lowered by Rs. 12,500 to Rs. 63,500.
4. Similarly, the Rs. 120,000 tax imposed on individuals with a monthly income of Rs. 600,000 will be cut by Rs. 12,500 to Rs. 107,5

Minister Gunawardena said that the government proposal had been submitted to the International Monetary Fund (IMF) and approval has been obtained.

Below is the circular issued by the Ministry of Finance outlining the personal income tax structure: