Sept 07, Colombo: Minister of Finance and Mass Media Mangala Samaraweera said the new Inland Revenue Act will be presented to Parliament for debate today.
The Bill was presented for the first time in July, and after the second reading debate today, the Third Reading Committee meeting will also be concluded today.
The Finance Minister earlier said the main objective of the new Inland Revenue Act is to reduce the indirect taxes levied from the people from 80% to 60% and increase the direct taxes from 20% to 40% within three years.
After the bill was presented by the Ministry of Finance, several cases were filed at the Supreme Court against the Bill. In the meantime, Minister Samaraweera discussed the bill with the trade union representatives of the Inland Revenue Department and other parties paying income taxes.
The Ministry will submit the revisions made to the bill on the basis of the Supreme Court ruling and discussions with trade unions to the parliament at the committee stage.
It is emphasized that this proposed new tax act does not affect the safety of the job of any officer of the Inland Revenue Department. Also, no additional taxation will be levied for the employees of the Employees Provident Fund and the Sri Lankan workers working overseas.
Also, the 'pay as you earn' (PAYE) annual taxable income limit will be increased from current earnings of Rs. 750,000 to Rs. 1.2 million. Accordingly, most people who pay tax at present do not have to pay taxes.
After the Inland Revenue Act was passed in Parliament, Remittance Tax, Capital Tax, Retention Tax, and Income Tax when earned paid by foreign companies when sending their profits to their home countries will be effective form 01st October while the corporate taxes and other income taxes will be effective from beginning of the new tax year from 1st April 2018.
Various tax rates that are currently levied at 10%, 12%, 15%, 20% and 40% have been simplified, and instead three tax rates will be introduced at 14%, 28%, and 40%.