Mar 08, 2016 (LBO) – Sri Lanka’s Prime Minister Ranil Wickremesinghe told Parliament that the government has decided to amend certain budget proposals applicable for this year.
“We hope to amend few budget proposals in line with medium term objectives of the development activities of the government as well as considering the current global scenario and new tax collection system,” Wickremesinghe said.
As per new amendments Statutory Income Tax has been increased from proposed 15 percent to 17.5 percent.
The government has decided to suspend 2016 budget proposals on Corporate and Non Corporate income tax revisions by one year. Existing 2015 rates will apply for these two taxes.
The government has also introduced Capital Gains Tax which has not been implemented in Sri Lanka from 1987.
‘We are imposing capital gains tax taking into consideration the increasing land and stock prices in the past decade,” Wickremesinghe said.
Value Added Tax has been simplified again to a single rate while increasing the rate to 15 percent from the current 11 percent.
2016 budget proposed a duel band VAT system with 8 percent and 12.5 percent.
Tax concessions on telecommunications, private education and private health have also been removed.
However essential goods and electricity has been exempted from VAT. VAT will only be imposed on selected retail and wholesale goods.
Nation building tax which is a tax collected based on the turnover will not be increased to proposed 4 percent from the current 2 percent.