Crisis-hit Sri Lanka hikes tax rates to maximise govt revenues

Date:

COLOMBO: Sri Lanka‘s government on Tuesday announced a taxation overhaul to maximise revenue amid the country’s crippling economic crisis, hiking value added taxes and corporate income tax, and slashing the relief given to individual tax payers.

Prime Minister Ranil Wickremesinghe, who took office this month and plans to present an interim budget within weeks, said that measures were necessary as the current state of government finances was unsustainable.

“…the implementation of a strong fiscal consolidation plan is imperative through revenue enhancement as well as expenditure rationalization measures in 2022,” Wickremesinghe’s office said in a statement.

An increase in Value Added Tax (VAT) from 8% to 12% with immediate effect is among the key tax increases announced on Tuesday, which is expected to boost government revenues by 65 billion Sri Lankan rupees ($180.56 million).

Other measures, including increasing corporate income tax from 24% to 30% from October, will earn an additional 52 billion rupees for the exchequer.

Withholding tax on employment income has been made mandatory and exemptions for individual tax payers have been reduced, the statement said. ($1 = 360.0000 Sri Lankan rupees)

Times of India

Share post:

spot_imgspot_img

Popular

More like this
Related

Dairy Industry Slumps Despite Surging Demand  Milk Farmers Face Crisis

The Sri Lankan dairy industry is at a crossroads....

Exporters Urged to Prepare for New VAT Refund Regime

With Sri Lanka’s long-running Simplified VAT (SVAT) scheme now...

Economic Recovery Stalls as Policy Reversals Undermine Reform

Sri Lanka’s path to recovery remains woefully unfinished. While...

SL Construction Sector Gains Momentum, but Relief Delay Stalls Broad Recovery

Sri Lanka’s construction industry, long battered by economic turbulence,...