Sri Lanka’s Betting and Gaming tax law will be amended  to  provide more teeth for Inland Revenue Department to crack down on casinos which are evading the payment of taxes making use loopholes in the existing law, Finance Ministry sources

The tax rates pertaining to Betting and Gaming Levy have not been revised from 2015 onwards. Hence, following amendments are proposed with regard to Betting and Gaming Levy effective from January 1, 2023, Prime Ministers office announced. 
Annual Levy for carrying on the business of gaming will be increased to Rs. 500 Mn  from Rs. 200 Mn..

Annual Levy for betting will also be increased to Rs. 5 Mn. From Rs. 4 Mn when it is carried on through agents.

Annual levy betting is to be increased to Rs. 1 Mn from Rs. 0.6 Mn when it is carried on using live telecast facilities.

The annual levy will be increased to to Rs. 75,000. from Rs. 50,000 when betting  is carried on without the use of live telecast facilities

The levy on Gross Collection of beeting centres will be increased  to 15 percent from 10 percent.

In addition to the tax policy reforms, steps will be taken to strengthen revenue administration at revenue collecting agencies such as Sri Lanka Customs, Inland Revenue Department and Excise Department with the infusion of technology and rigorous tax audits, Finance Ministry sources disclosed.

Chairperson of the Ruling Party-backing trade union Podujana Guru Sangamaya Wasantha Handapangoda has reportedly been arrested by the Criminal Investigation Department (CID) in alleged connection with the mob attack by pro-Rajapaksa protesters on peaceful protests held in front of Temple Trees and in the GalleFace ground on May 09.

Along with Handapangoda were five other suspects arrested in connection with the assault.

The suspects are due to be produced before the Court after recording statements, reports added.

MIAP

The High Commissioner of Bangladesh H E Tareq Md Ariful Islam handed over a donation of essential medicines worth 2.2 million USD to the Health Minister Dr. Keheliya Rambukwella in the morning hours of today. The donation consists of 79 essential medications including anti-cancer, anti-hypertensive, antibiotic oral and injectables, anti-viral, anti-epileptic and anti-asthmatic medication.

The High Commissioner stated that Bangladesh is happy to assist Sri Lanka during this difficult time and are honored to have this opportunity to assist a country that they have ties to historically. He also stated that they stand to assist Sri Lanka in any way possible in the future. The Minister, while thanking the High Commissioner, the Government of Bangladesh, and the people of Bangladesh for the timely donation expressed his desire to further strengthen the relationship between the two countries.

The High Commissioner and Minister also discussed how the two countries can collaborate within the pharmaceutical industry and exchange of human resources in the medical industry.

Media Unit

Ministry of Health

Sri Lanka introduced a low tax regime in late 2019. The reforms included the reduction of tax rates of Value Added Tax (VAT), Personal Income Tax (PIT) and Corporate Income Tax (CIT), and narrowing tax bases of VAT and PIT, while introducing a plethora of tax incentives, such as tax exemptions for agriculture and Information Technology (IT) and enabled services, tax deductions and tax holidays. This caused an annual loss of around LKR 600 billion – 800 billion in tax revenue to state coffers.

Therefore, these reforms are now being looked as policies that led to a significant loss of government revenue, partly due to the spread of COVID-19 pandemic in 2020/2021 and related developments, which affected the revenue generation process, ultimately resulting in the lowest revenue to GDP ratio in the region. The revenue to GDP ratio has declined to 9.1 percent in 2020 from 12.7 percent in 2019 and further deteriorated to 8.7 percent in 2021. This is significantly lower than the average revenue ratio of around 25 percent of GDP in emerging market and developing economies.

The low tax regime, the impact of the COVID-19 pandemic on revenue mobilization, together with the pandemic relief measures, widened the budget deficit significantly to 11.1 percent of GDP in 2020 and 12.2 percent of GDP in 2021 from 9.6 percent of GDP in 2019. This has led to an increase in the government debt to GDP ratio to 100.6 percent in 2020 and 104.6 percent in 2021 from 86.9 percent in 2019.
This fiscal imbalance has significant adverse spillover effects over the economy. Sri Lanka’s economic outlook remains vulnerable with the unprecedented inflationary pressures, persistently large fiscal and balance of payment financing needs, large debt overhang and critically low level of reserves and pressures on the exchange rate. Economic growth will be adversely affected by the foreign currency shortage and ensuing economic conditions prevailing in the country as well as loss of business and investor confidence due to credit rating downgrades.

The loss of access to international markets and the relatively low amount of other foreign exchange inflows to the government have created substantial issues in financing the government budget deficit. In 2020 and 2021, the entire budget deficit was financed through domestic sources as there were net repayments to the foreign sources. Of the domestic sources to finance the budget deficit, the majority was obtained from the banking sources, particularly from the Central Bank of Sri Lanka, given the unavailability of sufficient amount of net financing in the domestic non-bank sources. Continuous significant amount of Central Bank monetary financing has adversely affected the economy, particularly with the significant pressure on the inflation and the exchange rate.

At present, the situation has aggravated to a very critical level where the General Treasury has to increasingly obtain Central Bank financing to make the government expenditures, including a substantial part of interest, salaries and wages, pensions and Samurdhi payments etc. This is clearly unsustainable and hence the implementation of a strong fiscal consolidation plan is imperative through revenue enhancement as well as expenditure rationalization measures in 2022 and beyond to ensure macroeconomic stability to support the medium to long-term economic growth objectives of the country.

In the above background, the following tax reforms are proposed to be implemented over the immediate and near term. Please find annexures attached below.

Prime Minister’s Media Division

2022.05.31

Military formalities, including a Guard Turn Out and a colour-rich Guard of Honour saluted the outgoing 23rd Commander of the Sri Lanka Army, General Shavendra Silva at the formal farewell ceremony, held at the Army Headquarters this afternoon (31), amidst a representative gathering of senior officers and other ranks of the Army.