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Implementation of new Tax Proposals

 

INCOME TAX

  • Income Tax Rate applicable on construction industry shall be reduced from 28% to 14%, with effect from the year of Assessment 2019/2020

  • Income of an Individual up to Rs. 3,000,000 per annum from any source of income shall be exempted from income tax and the excess income to that amount shall be liable for income tax at the progressive rate of 06%, 12% on each tax slab of Rs. 250,000 and 18% on the excess, with effect from January 01st 2020.

  • Income from the Information Technology and enabling services shall be exempted from all taxes with effect from the year of Assessment 2019/2020

  • Income earned from the supply of services for the receipt of foreign currency shall be exempted from income tax with effect from December 01st 2019.

  • Income from Agriculture, Fisheries and Livestock shall be exempted from income tax with effect from the year of Assessment 2019/2020

  • Religious institutions shall fully be exempted from income tax with effect from December 01st 2019

 

VALUE ADDED TAX (VAT)

  • VAT rate will be revised to 8% with effect from December 01st 2019.

    • supply of services by a hotel, guest house, restaurant or other similar businesses providing similar services, registered with the Sri Lanka Tourism Development Authority, if not less than sixty per centum (60%) of the total value of the inputs are sourced from local supplies/sources - Zero per centum (0%)
    • supply of financial services - Fifteen per centum (15%),
    • import of goods (Fabrics) set out in the H.S. Code and description specified in Column I and II of Schedule of the Extraordinary Gazette Notification No.2095/20 dated November 1, 2018, - the rate specified in the corresponding entry in Column III of such Schedule [Zero per centum (0%)]
    • import and/or supply of goods or supply of services, other than supply of services/import of goods as referred to under above paragraphs - Eight per centum (8%).
  • The liable limit for registration of VAT will be increased to 300 Mn per annum (25 Mn per month) with effect from January 01st 2020


NATION BUILDING TAX (NBT)

  • NBT will be abolished with effect from December 01st 2019.

 

WITHHOLDING TAX (WHT)

  • Interest Income up to Rs. 250,000 per month shall be exempted from Withholding Tax (WHT) with effect from January 01st 2020

 

PAY AS YOU EARN (PAYE)

  • Tax free threshold of the employment income of all public and private sector employees for the purposes of the Pay-As-You-Earn (PAYE) shall be increased from Rs. 100,000 to Rs. 250,000 per month and the excessive personal income tax at the progressive rate of 06%, 12% on each tax slab of Rs. 250,000 and 18% on the excess, with effect from January 01st 2020.

 

 



As Qualified Secretaries with more than 20 years (since 1999) of experience in this industry, We Siska Management Systems (Private) Limited is capable of registering your company for you.

Please do not hesitate to call us or to send an email to us.