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Govt: Rental income tax will affect only high-wealth individuals
The Ministry of Finance yesterday said that the focus of envisaged Rental Income Tax was on high-wealth individuals, and not on average income earners. In a statement titled ‘Clarification on Imputed Rental Income Tax’ the Ministry said: The recent publication of the International Monetary Fund (IMF) supported Extended Fund Facility (EFF) programme related documents make reference to a proposed property tax to be implemented as an imputed rental income tax. The purpose of this press release is to clarify certain speculations and misconceptions regarding the same.
“One of the key reasons for Sri Lanka’s deep, complex and unprecedented economic crisis is the sharp decline in government tax revenue that led to high budget deficits and resultant escalation of public debt to unsustainable levels. Accordingly, the remedial measures to recover from the crisis have entailed a focused effort to improve the revenue of the government. Revenue based fiscal consolidation has been implemented during the last two years in an attempt to bring Sri Lanka’s government revenue from a record low 8.3% of GDP in 2022 to 15% of GDP by end 2025. In the year 2023, tax reforms focused on progressive corporate and personal income tax measures. In 2024, revenue enhancement is supported by Value Added Tax (VAT) reforms, including elimination of most exemptions and rate adjustments.
“Thus far, the revenue targets for 2023 have been largely met and target for 2024 is on track to reach the required level of 13.5% of GDP by end 2024. Therefore, there remains 1.5% of GDP revenue gains expected in 2025 in order to reach the 15% of GDP revenue target. The main revenue measure expected to help achieve the 2025 target is a wealth tax that is focused on property. From the outset of the IMF programme approval in March 2023, the revenue measures expected in 2023, 2024, and 2025 have been clearly presented in the public domain.
“The envisaged property tax is in an advanced stage of design and therefore, it is premature to outline specific details of rates and thresholds. However, the focus of this tax is on high wealth individuals, and not on average income earners. This objective will be achieved by a suitable tax-free threshold to ensure that the tax is targeted on very high value property or multiple properties that are owned by wealthy members of society. This specific targeting is evidenced by the fact that the tax is expected to yield 0.2% of GDP by 2025 and 0.4% of GDP in a full year in 2026.
“The design of the tax will also ensure appropriate set off mechanisms to avoid double taxation and any elements that distort economic incentives. Property taxes are implemented in many countries (including developing countries like India) since they are considered to be a highly efficient, progressive, and non-distortive means of generating revenue to fund public services.
“The tax is expected to go through the regular legal process of amendments to the required legislation and is expected to come into force in April 2025. In addition to completing the legislative process, there is significant administrative work required to be done in terms of improving valuation mechanisms and databases in order to implement this proposed tax measure that was first announced in March 2023 with the publication of IMF programme documents. In fact, that is not a new tax measure. The Inland Revenue Act No. 10 of 2006 included a similar imputed income calculation termed “Net Annual Value”. Property in Sri Lanka is also subject to existing taxes such as local authority Rates and Stamp Duty – therefore, there is significant precedence for such a property tax.”
The continued improvement of government revenue and associated reduction in budget deficits has supported the government’s efforts to restore economic stability, and has helped bring down interest rates and support appreciation of the currency, which brings with it material improvements to all citizens. A failure to reach the required level of government tax revenue that can fund public expenditure would lead to a recurrence of the economic crisis that had devastating impacts on the entire country.
News
Record 1,600 students take Russian Classical Ballet examination in Sri Lanka
More than 1,600 students sat this year’s Russian Classical Ballet Examination, the largest number ever to take part in the examination in Sri Lanka. Exams were held in Colombo from 5, to 18, October and in Galle on 10 October.
Students aged four and above came from across the island, including Colombo, Galle, Gampaha, Negombo, Matara, Kelaniya, Panadura, Wattala, Kiribathgoda, Ratnapura, Kandy, Kurunegala, Bandarawela and Badulla. They are taught by 15 dedicated teachers trained in the Vaganova method, the renowned Russian system of classical ballet training.
They were examined by Dr. Oxana Karnovich of the Moscow State Academy of Choreography, a distinguished academic and curator.
The Russian School of Ballet and Dancing was established in 2001 by Michael Ustinov, Buddhapriya Ramanayake and Mrs Chandi Aluvihare, with Mrs Galina Pleshakova as its founding instructor. Today the School is led by Director Madam Maria Popova, Counsellor of the Embassy of the Russian Federation in Sri Lanka.

News
Buddhist hierarchy demands prison perks for monk convicts
MONETABRIEF– Sri Lanka’s two most senior Buddhist chapters, Malwatte and Asgiriya, demanded special concessions for monks serving prison sentences, following the disrobing of convicted monk Ven. Galagodaatte Gnanasara in line with established procedures.
The chief prelate of the Asgiriya chapter, Most Venerable Warakagoda Sri Gnanarathana, told Prisons Commissioner Senaka Palletenna that Ven. Gnanasara, who is serving a six-year sentence for contempt of court, must be released immediately.
Prison authorities have no power to release or pardon convicts, but Palletenna told the monk in Kandy on Friday that he would convey his request to the relevant government authorities.
“There is no point in talking about this and that… The entire country has been shaken (??????? ) . He must be released,” the Asgiriya chief prelate said.
The Malwatte chief prelate, Most Venerable Thibbatuwawe Sri Siddhartha Sumangala, appeared to accept the court verdict against Ven. Gnanasara, but asked the prisons chief whether a separate section could be established for convicted monks.
Palletenna noted that a special ward for the clergy already existed at Welikada Prison.
At least 63 convicted Buddhist monks are currently incarcerated within Sri Lanka’s criminal justice system.
Meanwhile, a group of 34 Buddhist monks named in a Colombo Fort Magistrate’s Court order to vacate the vicinity of the Presidential Secretariat ended their protest and dispersed after lunch on Friday.The monks are demanding an unconditional pardon for Ven. Gnanasara, who has previously been imprisoned, making him a reconvicted prisoner.
News
Debate on NCM against Speaker postponed indefinitely
The debate on the no-confidence motion against Speaker Dr. Jagath Wickramaratne, submitted by the Samagi Jana Balawegaya (SJB), has been postponed indefinitely pending the Attorney General’s opinion on certain technical issues in the motion.
Government representatives raised the matter at a meeting of the Committee on Parliamentary Business, pointing out that several provisions of the motion required clarification and that the Attorney General’s advice should be obtained.
As obtaining the opinion would take time, the debate could not be scheduled for the next parliamentary week, parliamentary sources said.
Chief Opposition Whip Gayantha Karunatilaka said a date for the debate would be decided after the Attorney General’s advice was received.
Meanwhile, Parliament is scheduled to meet from October 20 to 23, Secretary General of Parliament Kushani Rohanadeera announced.
The parliamentary business for the week was finalised at a meeting of the Committee on Parliamentary Business held on Friday (16) under the chairmanship of Deputy Speaker Dr. Rizvie Salih.
On each sitting day, the period from 9.30 a.m. to 10 a.m. will be allocated for parliamentary business under Items 1 to 6 of Standing Order 22. Questions for Oral Answers will be taken up from 10 a.m. to 11 a.m., followed by questions under Standing Order 27(2) from 11 a.m. to 11.30 a.m.
On Tuesday, October 20, an Opposition-sponsored Adjournment Motion will be debated from 11.30 a.m. to 5.30 p.m.
On Wednesday, October 21, a resolution under the Public Debt Management Act and a Supplementary Estimate will be taken up for debate and approval from 11.30 a.m. to 5 p.m. The annual reports of five statutory institutions will subsequently be presented for approval without debate, while questions at the Adjournment Time will be taken up from 5 p.m. to 5.30 p.m.
On Thursday, October 22, the Second Reading debates on two Bills to amend the Poisons, Opium and Dangerous Drugs Ordinance (Bills Nos. 79 and 80) will be held from 11.30 a.m. to 5 p.m.
The annual reports of five statutory institutions will then be taken up for approval without debate, followed by an Opposition-sponsored Adjournment Motion from 5 p.m. to 5.30 p.m.
On Friday, October 23, the Second Reading debate on the Elimination of Rabies and Registration of Dogs Bill will be held from 11.30 a.m. to 5 p.m. A Government-sponsored Adjournment Motion will be debated during the final half-hour of the sitting.
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