January 01, Colombo (LNW): Cabinet Spokesman and Minister Dr. Nalinda Jayathissa assured the public yesterday (31) that children’s savings accounts with monthly earnings under Rs. 150,000 would not be subject to any withholding tax on interest.
His comments followed inquiries from the media regarding the controversial 10 per cent withholding tax imposed on interest earned from accounts held by children under the age of 18.
The Minister clarified that this tax would only be applicable in cases where the child’s total monthly income, including interest from savings, exceeds the Rs. 150,000 threshold.
In such instances, the interest earned on the savings would be included in the taxable income.
He stressed, however, that this would not affect the majority of children’s accounts, where the interest typically falls below this threshold.
Further addressing concerns raised by journalists, Dr. Jayathissa mentioned that the government was actively working to streamline and ease the process of tax recovery.
“We are developing a new system that will simplify the process of refunding withholding tax, which will come into effect from April 1 of the coming year,” he explained. “This measure will ensure that the public faces minimal challenges when dealing with the Inland Revenue Department.“
Additionally, the Minister pointed out that extensive consultations are taking place with Sri Lanka’s banking sector to ensure that the tax-related processes are made as convenient as possible for account holders.
By coordinating with the banks, the government intends to create a seamless experience for the public, allowing them to manage their tax matters efficiently through banking channels.
Dr. Jayathissa concluded by expressing confidence that these measures would ultimately benefit the public by making tax procedures more transparent, accessible, and straightforward.
