May 05, 2016 (LBO) – The Cabinet of Ministers have approved a proposal made by Finance Minister Ravi Karunanayake to instruct the Legal Draftsman to redraft the Inland Revenue Act according to international standards improving clarity and transparency.
The Inland Revenue Act No 10 of 2016 provides legal provisions to impose income tax in Sri Lanka and due to periodical amendments made to the act since its enactment have made it complicated.
Simplification and modernization of the act according to acceptable tax principles that helps in attracting investors has become a timely requirement.
2016 budget proposed to amend the Inland Revenue Act to accommodate foreign investments and to exempt income tax on foreign currency inflows.
The budget also proposed a new Act named ‘Foreign Exchange Management Act’ to be introduced to facilitate foreign investments.