Sav­ings in­ter­est taxed higher un­der new tax law, so are for­eign cur­rency de­posits

Daily Mirror (Sri Lanka) - - PRO­VIN­CIAL -

The in­ter­est on sav­ings made by Sri Lankans have been made li­able for a higher with­hold­ing tax by the new In­land Rev­enue Act, which was passed in par­lia­ment last week, a busi­ness fo­rum in Colombo was told yes­ter­day.

Ac­cord­ingly, the govern­ment will deduct 5.0 per­cent of the in­ter­est re­ceived from all sav­ings by Sri Lankans, bar­ring se­nior cit­i­zens, but that is also up to a cer­tain level when the in­ter­est is given to the de­posit holder at ma­tu­rity. Cur­rently, the govern­ment keeps 2.5 per­cent of the in­ter­est of in­di­vid­ual de­pos­i­tors as the with­hold­ing tax, a change from the pre­vi­ous prac­tice of step-up rate

ap­pli­ca­ble on de­pos­i­tors based on their an­nual in­come from de­posit in­ter­est. How­ever, the in­ter­est re­ceived by a se­nior cit­i­zen up to Rs.1.5 mil­lion per an­num has been ex­empted from the with­hold­ing

tax, said Ernest & Young Part­ner Nishthar Su­laiman, at a sem­i­nar on the new In­land Rev­enue Act held at the Na­tional Cham­ber of Com­merce, yes­ter­day.

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