Tax in Sri Lanka
The personal tax in Sri Lanka is 15%. The Sri Lanka interest rate averaged 28.08% from 2004 to 2016, reaching the highest level of 35% in 2007 and the historic low of 15% in 2016.
In Sri Lanka, personal income tax is a tax imposed by individuals and tax on various sources of income such as work, pensions, interest and dividends. The Benchmark we use refers to the highest marginal tax rate for natural persons. Personal income tax is an important source of income for the Sri Lankan government.
Sri Lanka's new income tax law aimed at simplifying taxes and easing the burden on low-income people will take effect today, the Revenue Department said. Internal tax commissioner Ivan Disanayake, following the new tax law, has stated that tax rates have changed in a number of areas and will depend on the tax payer's income. Now a new tax law is introduced n. 24 of 2017 which will change the fiscal policy of different sectors.
According to finance minister Mangala Samaraweer, the law will lighten the burden on low-income people and effectively enforce the high income group's income laws.
The minister said earlier that the main purpose of the new Internal Revenue Act is to simplify the tax system to create an environment favorable to investors to attract more foreign direct investment. According to him, the existing tax system is complex and investors hardly understand it.
The law will reduce indirect taxes imposed by people from 80% to 60% and will raise direct taxes from 20% to 40% within three years. The minister notes that there has been no increase in tax revenues alongside the country's income growth, and Sri Lanka's tax revenues remain low compared to other countries in the region.
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