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PAYE tax back in new form

12 Apr 2020

The Government last week re-introduced a different version of the Pay As You Earn (PAYE) tax as an advance personal income tax to be deducted by the employer with effect from 1 April. Accordingly, with effect from 1 April, on the request of an employee whose gross remuneration for a month exceeds Rs. 250,000 per month or Rs. 3,000,000 for a year of assessment, an Advance Personal Income Tax could be deducted by the employer. Announcing the tax revisions, the Inland Revenue Department (IRD) said as instructed by the Ministry of Finance on 31 January and March 5, changes have been proposed to the Inland Revenue Act No. 24 of 2017 (IRA) pending formal amendments being made to the Act, and to be implemented with effect from 1 January 2020, unless otherwise stated. The changes proposed include the removal of the requirement for deduction of Withholding Tax (WHT) (including PAYE) on any payment which is due and payable to resident persons by any withholding agents (WHA). In addition, the income tax rate of a company, an individual or a partnership, income tax rates on certain profits of specific industries and tax slabs of individuals have been revised. According to the IRD, the taxable income of a company was set at 24% while on gains and profits from specific businesses, it was set at 14%. Taxes on gains and profits from manufacturing, from conducting betting and gaming, and the manufacture and sale or import and sale of any liquor or tobacco products were set at 18%, 40%, and 40%, respectively. In November last year, soon after the new Government came into power, it announced the removal of a number of taxes including the PAYE and also the reduction of the Value Added Tax (VAT). Accordingly, the Nation Building Tax (NBT) imposed on household goods and service products was completely removed. WHT on interest has also been removed. The debit tax imposed on banks and other financial institutions as well as the capital gains tax imposed on the Colombo Stock Exchange (CSE) has been removed. The Cabinet also granted approval to abolish the PAYE tax as well as the Debt Repayment Levy.

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Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Automobile, Mother and Baby Products, Clothing, and Fashion. Additionally, Kapruka offers unique online services like Money Remittance, Astrology, Medicine Delivery, and access to over 700 Top Brands. Also If you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.Send love straight to their heart this Valentine's with our thoughtful gifts!


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