News
President announces PAYE tax reductions
Imputed rental tax to be implemented in 2025
Withholding tax increased from 5% to 10%
President Anura Kumara Dissanayake yesterday told Parliament that the PAYE tax threshold be increased from Rs. 100,000 to Rs. 150,000.
“We held discussions with the IMF and were able to raise the tax threshold from Rs. 100,000 to Rs. 150,000 per month,” President Dissanayake said.
President Dissanayake said that the Withholding Tax would be increased from 5% to 10% and tax on services exports would be reduced to 15% from 30%.
The President said: “During the initiation of the third review, we decided to reduce the burden of the Pay-As-You-Earn (PAYE) tax imposed on professionals in our country. There was significant dissatisfaction regarding this tax among professionals such as university academics, doctors, and bank officials.
Following discussions, we were able to increase the tax-free threshold from LKR 100,000 to LKR 150,000. Additionally, the first band of the Personal Income Tax (PIT), taxed at 6%, was extended from LKR 600,000 to LKR 01 million. Accordingly:
• An individual earning a monthly income of LKR 150,000 pays zero tax.
• An individual earning LKR 200,000 is exempted from 71% of the tax they would have otherwise paid.
• An individual earning LKR 250,000 is exempted from 61% of the tax.
• An individual earning LKR 300,000 is exempted from 47% of the tax.
• An individual earning LKR 350,000 is exempted from 25.5% of the tax.
What does this mean? We have successfully provided greater relief to lower-income earners while offering reduced benefits to higher-income earners, achieving a fair and balanced outcome through this review.”
“Immediately after the conclusion of the general election, on 16 Nov., we began the third review discussions with the IMF. During the second review, several preconditions and agreements were reached by the previous government. One such agreement was the imposition of an imputed rental income tax, which is scheduled to be implemented in 2025, as agreed upon during the second review,” the President said, adding that vehicle imports would resume on 01 Feb. 2025, and that would be carried out under a structured programme.
The President said the government would resume vehicle imports in three stages.
The import of buses used for passenger transport and vehicles used for special services had begun on 14 Dec., 2024, he said, stressing that Sri Lanka would not face a foreign exchange crisis due to this decision.
“Through lengthy discussions with the Central Bank, the government has estimated the amount of dollars that would be spent due to the importing of vehicles and the impact on the economy. In order to strengthen our economy, we must reopen vehicle imports,” he added.
The President said the suspension of the parate execution law had been extended until March 2025.
The law was previously set to remain suspended until 15 December, 2025, following a conditional approval of the Committee on Public Finance (COPF) under the previous Government.
President Dissanayake said the decision to extend the suspension of parate executions by three and a half months had been made following concerns raised by Sri Lanka’s banks, regulators, and small and medium enterprises (SMEs) about challenges in loan repayment and the impact of the law on struggling businesses.
However, he cautioned that such action could have an adverse impact on banks and financial institutions, stressing the need to balance support for SMEs while protecting the banking system.
President Dissanayake said that the total outstanding debt currently stands at Rs. 1,385 billion, involving 752,886 debtors. Of these, 99% are defaulters with loans of less than Rs. 25 million, he said.
“Defaulters who have loans below Rs. 25 million will be given an opportunity to restructure their debt until 12 December, 2025. They must present a debt restructuring plan to their banks by March,” the President said.
News
Courtesy call by the Heads of Mission- Designate on Prime Minister
The heads of mission designate to Sri Lanka paid a courtesy call on Prime Minister Dr. Harini Amarasuriya on 26th of March at the Prime Minister’s office.
The delegation comprised Dharshana M. Perera, High Commissioner – designate of Sri Lanka to Malaysia, Ms. Dayani Mendis, Ambassador and PRUN – designate of Sri Lanka to Austria, Ms. N.I.D. Paranavitana, Ambassador – designate of Sri Lanka to Ethiopia & African Union, Prof. (Ms.) M.I. Fazeeha Azmi,Ambassador – designate of Sri Lanka to Iran, Saman Kumara Chandrasiri, Ambassador – designate of Sri Lanka to Israel, and M. Farook M. Fawzer, Representative – designate of Sri Lanka to Palestine.
The Prime Minister, Dr. Harini Amarasuriya, extended her best wishes to the Heads of Mission–designate and underscored the importance of their forthcoming assignments in advancing Sri Lanka’s national interests emphasizing their collective role in contributing towards the socio-economic upliftment of Sri Lanka.
The Prime Minister further highlighted the importance of projecting a positive and credible image of Sri Lanka internationally, through consistent, professional, and strategic engagement in their respective host countries and multilateral platforms.
She encouraged the Heads of Mission to actively identify and facilitate high-quality investment opportunities, particularly in sectors aligned with Sri Lanka’s development priorities, with a focus on sustainability, innovation, and long-term value addition.
Particular emphasis was placed on the promotion and diversification of Sri Lanka’s exports, including the exploration of new markets and strengthening trade linkages.
The meeting was attended by the Secretary to the Prime Minister, Additional Secretary to the Prime Minister Ms. Sagarika Bogahawatta and heads of mission-designate.
[Prime Minister’s Media Division]
News
SC finds Keheliya, others, guilty of violating FRs of public through corrupt drug procurement deal
The Supreme Court yesterday held former Health Minister Keheliya Rambukwella and several senior health officials liable for violating the fundamental rights of the public over a controversial drug procurement carried out under the 2022 Indian Credit Line.
Delivering the judgment, a three-judge bench, headed by Chief Justice Preethi Padman Surasena, and comprising Justice Kumudini Wickremasinghe and Justice Janak de Silva, found that the procurement of medical supplies from an unregistered company, in breach of established procedures, had resulted in a serious infringement of public rights.
The Court ruled that the granting of a Waiver of Registration by the authorities was “wrongful, arbitrary and capricious,” and held that the direct procurement carried out on an unsolicited basis was unlawful. The transaction was accordingly declared null and void.
In a significant order, the Court directed Rambukwella to pay Rs. 75 million in compensation to the State from his personal funds.
The then Health Ministry Secretary Janaka Chandragupta and former Chairman of the National Medicines Regulatory Authority (NMRA), Prof. S. D. Jayaratne, were each ordered to pay Rs. 50 million.
The Court further directed NMRA Chief Executive Officer Dr. Wijith Gunasekara and former Director of the Medical Supplies Division Dr. Thusitha Sudarshana to pay Rs. 50 million each as compensation.
The ruling followed the hearing of a fundamental rights petition filed by Transparency International Sri Lanka and two other parties.
The Court also instructed the Commission to Investigate Allegations of Bribery or Corruption to initiate appropriate action under the Anti-Corruption Act against those found responsible.
Senior Counsel Senany Dayaratne, with Nishadi Wickramasinghe, Lasanthika Hettiarachchi, Janani Abeywickrema and Maheshika Bandara, appeared for the petitioners.
News
Sajith nudges govt. to follow India’s example in giving relief to consumers by slashing taxes on fuel
Opposition and SJB Leader Sajith Premadasa yesterday urged President Anura Kumara Dissanayake to reduce taxes on fuel, just as the Indian government has done.
He said in a post on X that “Modi government has decided to reduce the Special Additional Excise Duty on petrol and completely remove it for diesel in order to cushion the hardship on the Indian consumer. High time for Anura Kumara Dissanayake to keep up to his election promise and follow suit.”
Meanwhile foreign media reported that India has slashed excise duties on petrol and diesel to protect consumers and rein in a potential spike in inflation, while imposing windfall taxes on aviation fuel and diesel exports, amid volatile global oil markets, as a result of the Iran war.
Global oil prices have surged past $100 per barrel after the near closure of the Strait of Hormuz, which serves as a conduit for 40% of India’s crude oil imports, since the US and Israel first struck Iran on February 28.
In a government order, released late on Thursday, India’s Finance Ministry reduced the special excise duty on petrol to three Indian rupees ($0.0318) per litre from 13 Indian rupees earlier. It also cut the duty on diesel to zero from INR 10 rupees per litre.
The government did not say how much the duty cuts would cost. The move comes ahead of elections next month in four Indian states and one federal territory, with Indian voters known to be extremely sensitive to higher prices.
“Government has taken a huge hit on its taxation revenues to ensure very high losses of oil companies, approximately 24 rupees a litre for petrol and 30 rupees a litre for diesel, at this time of sky high international prices, are reduced,” Indian Oil Minister Hardeep Singh Puri said in a post on X.
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