Apr 03, 2018 (LBO) – Sri Lanka’s Finance ministry says the government expects to earn a an additional revenue of 60 billion rupees each year through the new Inland Revenue Act (IRA).
“This year, we expect the government to rake in 30 billion rupees,” S.R. Attygalle, deputy secretary of the Finance and Mass Media Ministry said.
“The additional revenue will effectively be generated only in the last two quarters of the year from taxes under the new Inland Revenue Act which came into effect 1 April 2018.”
He was addressing a media briefing in Colombo, Monday with Finance and Mass Media Minister Mangala Samaraweera and State Minister Eran Wickremaratne.
The Inland Revenue Act No 24 of 2017 passed on October of last year had sought to broaden the tax base, reduce the number of indirect taxes and simplify the overall tax structure, Minister Samaraweera said.
In Malaysia, the percentage of tax revenue from direct taxes stands at 72 percent, in India the figure is at 54 percent, in South Korea at 45 percent, in Bangladesh 32 percent but in Sri Lanka the number stands at 18 percent.
“This Inland Revenue Act is the most progressive in South Asia. It was formulated with the aim of delivering social justice. Sri Lanka cannot maintain its universal healthcare and education policies without sufficient income.”
The Act includes income tax being exempted for individuals earning under 100,000 rupees per month, an exemption on remittances, tax holidays for investors.
It also has provisions to investment funnelled to the war-affected north.
Pensioners earning interest of 1.5 million rupees per annum would also be exempted from taxes, while any higher amount would come under 5 percent tax.