Vast changes are expected to take place in the country’s tax system with the implementation of the new Inland Revenue Act from tomorrow (Apr. 01).
Minister of Finance and Mass Media, Mangala Samaraweera said that the new tax system will create an investor-friendly environment.
However, many stakeholders say that the new Inland Revenue Act will have an impact on many fields.
The Joint Opposition thus charged that the general public will be inconvenienced as a result.
One of the key taxes imposed under the new Inland Revenue Act is the tax on capital gains.
When the second house or a land owned by an individual or an apartment which is considered to be investment asset, is sold, a tax of 10 percent on the difference between the sale value and the market value will be charged.
It is also noteworthy that the tax of 12 percent will be imposed on professionals who receive an annual income of 25.5 million rupees, has now been increased to 24 percent.
Professionals including doctors and lawyers who are receiving a monthly income of more than 300,000 rupees are especially expected to be affected by the tax.
The limit on Payee Tax which was previously imposed on an annual income of 750,000 rupees or above has now been increased to 1.2 million rupees and therefore, certain taxpayers will be exempted.
A new tax of 5 percent will be imposed on the interest received on the funds maintained in Sri Lankan banks by Sri Lankan professionals residing overseas.
In addition, a withholding tax of 5 percent will be charged on the interest earned on funds maintained in savings accounts.
This tax will be imposed on the interest earnings of senior citizens as well.