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Crisis-hit Sri Lanka hikes tax rates to maximise govt revenues
COLOMBO: Sri LankaThe government on Tuesday announced a tax overhaul to maximize revenue amid the country’s crumbling economic crisis, increasing value-added tax and corporate income tax, and cutting relief for individual taxpayers.
Prime minister Ranil Wickremesinghewho took office this month and expected to submit an interim budget within weeks, said the measures were necessary because the current state of government finances was unsustainable.
The Wickremesinghe office said in a statement: “…the implementation of a strong fiscal consolidation plan is imperative through revenue enhancement as well as spending streamlining measures by 2022.” .
Get a raise V.a.t tax (VAT) from 8% to 12% with immediate effect were among the key tax hikes announced on Tuesday, expected to boost government revenue by 65 billion Sri Lankan rupees ( 180.56 million USD).
Other measures, including increasing corporate income tax from 24% to 30% from October, will raise an additional Rs 52 billion crore for completion.
The statement said withholding tax on employment income has been made mandatory and exemptions for individual taxpayers have been reduced. (1 dollar = 360.0000 Sri Lankan rupees)
Prime minister Ranil Wickremesinghewho took office this month and expected to submit an interim budget within weeks, said the measures were necessary because the current state of government finances was unsustainable.
The Wickremesinghe office said in a statement: “…the implementation of a strong fiscal consolidation plan is imperative through revenue enhancement as well as spending streamlining measures by 2022.” .
Get a raise V.a.t tax (VAT) from 8% to 12% with immediate effect were among the key tax hikes announced on Tuesday, expected to boost government revenue by 65 billion Sri Lankan rupees ( 180.56 million USD).
Other measures, including increasing corporate income tax from 24% to 30% from October, will raise an additional Rs 52 billion crore for completion.
The statement said withholding tax on employment income has been made mandatory and exemptions for individual taxpayers have been reduced. (1 dollar = 360.0000 Sri Lankan rupees)