President Anura Kumara Dissanayake says that the government was able to reach an agreement with the International Monetary Fund (IMF) to increase the Pay As You Earn (PAYE) Tax exemption limit from Rs. 100,000 to Rs. 150,000.
Delivering a special statement in Parliament today (18), the Head of State informed the House that following discussions with the IMF on the third review of the Extended Fund Facility (EFF) for Sri Lanka, it was agreed to increase the income tax threshold (tax-free) from a monthly income of Rs. 100,000 to Rs. 150,000.
“When the third review began, our proposals were on the income tax imposed on professionals. We resumed discussions. The tax threshold was over Rs. 100,000. We were able to increase it to Rs. 150,000,” President Dissanayake said.
He went on to explain the new income tax revisions, adding:
“We were also able to get the first bracket of personal income tax revised from Rs. 500,000 to Rs. 1 million, subject to a tax rate of 6%.”
“Accordingly, someone earning a salary of Rs. 150,000 per month is 100% tax exempt.
A person earning Rs. 200,000 is exempt from tax by 71%.
A person earning Rs. 250,000 is exempt from tax by 61%.
A person earning Rs. 300,000 is exempt from tax by 47%.
A person earning Rs. 350,000 is exempt from tax by 25.5%.”
“We have succeeded in revising the Pay As You Earn (PAYE) Tax, with less relief for those earning more and more relief for those earning less,” he added.
