Sri Lankan earnings from abroad to be tax free

Nov 07, 2007 (LBO) – Incomes earned abroad by Sri Lankans including dividends and interest earned abroad that is remitted through the banking sector would be made free of income tax, according to proposals in the 2008 budget. Profits and income by individuals, partnerships, fees and allowances and dividends or interest from investments outside Sri Lanka would be exempt from income tax.

But foreign nationals working inside Sri Lanka with special concessions will be subject to income tax as local professionals with similar expertise, Rajapakse said.

Sri Lankan government earned 113.82 billion rupees in 2007 as income tax while the 2008 budget proposed to increase revenue from income tax to 143.29 billion rupees.

New proposals will increase total tax revenue to 677.32 billion rupees in 2008, from 541.45 billion this year.

In other changes to income taxes deductions would be allowed without any limitation in respect of qualifying payment being investments in housing projects for the development of houses for inmates of shanties in urban areas, the budget said.

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