Sep 07, 2017 (LBO) – Sri Lanka’s Finance Minister will present the new income tax bill to Parliament on seventh of September, the ministry said issuing a statement.
“We have done the required amendments following discussions with the inland revenue department and the relevant stakeholders and now ready to debate,” it said.
The proposed new remittance, capital gains, withholding and payee tax will be effective from 1st October 2017 for foreign companies.
Under the new law, money earned from foreign employment will remain tax free. The corporate and income tax laws will come into effect from 1st April 2018.
The threshold for the payee tax has been increased to 1.2 million rupees from the earlier 750,000 rupees.
The act aims to widen tax net and in the next 2-3 years increase the direct tax component and reduce the indirect taxpayers.
The government expects the Inland Revenue Bill will be a key aspect of the fiscal consolidation drive after weak tax collection in recent years, partly due to the complexity of the Act.
The island’s Supreme court earlier ruled that certain provisions of the proposed new bill was not consistent with the constitution and need a referendum vote.
Many stakeholders had raised concern over several issues with regard to the act and were in discussion with the government.