Nov 06, 2015 (LBO) – Sri Lanka’s much talked about super gain tax imposed by the new administration in its interim budget 2015 need not be maintained, Prime Minister Ranil Wickremesinghe told Parliament on Thursday.
“With the intermediate budget guidelines, we imposed a Super Gain Tax. This was based on the fact that the demand for goods and services was down,” Wickremesinghe said.
“This tax served the purpose of propping up demand and providing relevant revenue. But now that has changed – people are once again actively making purchases and accordingly, we need not maintain the Super Gain Tax,” he said.
Sri Lanka imposed a 25 percent ‘super gains tax’ on any individual or company including subsidiaries and holding company in a group of companies earning over two billion rupees in profit before tax, in the interim budget 2015.
The government earlier said there are only 35 to 40 companies in the island who will have to pay the super gain tax.
The Inland Revenue Department says 468 companies have complied with the super gain tax and 18 billion rupees have been paid as the first installment by end October, according to a media report.
The second installment is due on 30th November and the third is on or before 31st December.
The ‘super gains tax’ was one of the new taxes proposed in a revised budget in January 29
Presenting the interim budget, Finance Minister Ravi Karunanayake said that the measure was taken to share the excess profits companies are making with the people.
However the tax was criticized by economists and corporate sector saying that it drives investors away and squeezes the capability of companies to invest further.