Senior citizens and withholding Tax

Many senior citizen who have toiled long to keep their home fires burning, have invested the money received from their provident fund, gratuity and other sources in fixed deposits (FDs) in banks to use the interest so derived to provide the required funds to obtain their day to day requirements. This includes medication for various old age ailments.

With the implementation of the new tax system, a five percent withholding tax (WHT) has been imposed on the interest accrued at maturity of all FDs. This is done even when the deposit is renewed along with the accrued interest. This would seem alright if such a tax is imposed when withdrawing the money and not at the time of renewal. When the WHT was introduced earlier, senior citizens were exempted from this tax being deducted from the interest at maturity.

As mentioned above, most senior citizen who have invested their hard earned money in FDs depend on the interest accrued to meet the expenses incurred on medication and other requirements of day to day living. The imposition of the WHT and its recent increase by a large margin has made it difficult for senior citizen entirely dependent on interest from their FDs to make ends meet.

As such, it is earnestly requested that those senior citizen solely dependent on interest from FDs be exempted from being charged WHT on the interest from their FDs as done earlier.

HM NISSANKA WARAKAULLE