In a bid to increase tax revenue curtailed by recently introduced tax relief measures, the Inland Revenue department has announced several tax revisions with retrospective effect from January 01 2020.
The Pay As You Earn (PAYE) tax scrapped in November last year has been re-introduced as an Advance Personal Income Tax (APIT) to be paid on a voluntary basis.
The Inland Revenue Department, in a circular, said the APIT can be levied on the request of an employee who earns more than Rs 250,000 a month or three million rupees for a year.
The Withholding Tax imposed on payments such as interest and rent has also been scrapped making way for an Advance Income Payment which could be made on the request of the recipient.
According to the circular, the taxable income of a company has been revised to 24 percent, while the gains and profits from manufacturing will be subjected to an 18 percent tax.
Meanwhile, Withholding Taxes will be imposed on interest payments to Sri Lankan expatriates who earn a monthly interest income of Rs 250,000 and an annual interest income of three million rupees from a bank or financial institution.
The amendments to the Inland Revenue Act reversed the raft of concessions offered by the government soon after it was elected to power in November last year.