The Ministry of Finance and Media will make several amendments to the Inland Revenue Act, No.24 of 2017, with the intention of easing the economic burden inadvertently placed on certain segments of the society, official sources said.
The amendments to the Inland Revenue Act, as proposed by the Minister of Finance, have been approved by the Cabinet of Ministers by the decisions dated 27.03.2018 and 30.05.2018. The Legal Draftsman has been instructed to draft the necessary legal provisions to give effect to the cabinet decisions. Minors who are less than 18 years of age will be exempted from the 5 percent withholding tax imposed on the interest earned on deposits maintained in any financial institution, the ministry said. According to the proposed amendment to the IR Act, the Withholding Tax (WHT) rate applicable to rent will be reduced to 5 percent from 10 percent.
WHT exemption of the Royalty payments will be made for residents, whose house rent do not exceed LKR.50,000 per month, subject to a maximum of LKR 500,000 per year of assessment.
WHT exemption will also be granted to the lease rentals paid to non-residents in relation to the leasing of aircrafts, by a resident entity engaged in air transportation.Interest paid to non-residents on loans obtained by any person will be exempted from income tax.
WHT Exemption will be given to non-residents for any gain including interest, discount or capital gain earned by them on sovereign bonds denominated in local or foreign currency, issued by or on behalf of the Government.
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