SL’s income tax revenue falls by nearly 22% in Jan.-Apr .‘20

Sri Lanka’s revenue from income tax has come down significantly during the COVID- 19 period, Finance Ministry data showed.

Revenue from income taxes declined considerably by 21.9 per cent to Rs. 81.4 billion during the first four months of 2020, compared to Rs. 104.3 billion during the same period of the previous year, realising 25.9 per cent of the annual estimate.

This was mainly due to the slowdown of economic activities resulting in the outbreak of a COVID- 19 pandemic coupled with the removal of Economic Services Charge ( ESC) and Withholding Tax ( WHT) with effect from January 1, 2020.

Moreover, increased personal income tax- free allowance to Rs. 3 million per annum from Rs. 500,000 per annum and rationalisation of Corporate Income Tax (CIT) structure effective from January 01, 2020, also affected this performance, Ministry data revealed.

However, revenue from corporate and noncorporate income taxes increased by 35.7 per cent to Rs. 57.9 billion during the same period.

Sri Lanka’s personal income tax payers are now getting relief up to Rs. 1.2 million a year for investments in stocks and securities, housing interest, pension contributions, medical insurance and children’ s education incurred within the country, official sources said.

Resident tax- payers and citizens abroad are also getting Rs. 3 million rupees of tax relief on all earnings.