Sri Lanka’s Information Technology sector completely exempted from all taxes
Sri Lanka’s Co-Cabinet Spokesperson, Minister Bandula Gunawardena has reportedly stated that the country’s Information Technology (IT) sector is to be completely exempted from all taxes.
Gunawardena made this announcement at the weekly Cabinet news briefing held at the country’s Information and Media at the Media Ministry.
The Minister has told the media that the IT sector is the only income source that has been totally exempted from all the taxes including income taxes, Value Added Tax (VAT) and Nation Building Tax (NBT).
“Considering the urgent need to fast-track development of the country’s IT sector, the President has taken this decision and it will definitely make a huge impact on the rapid growth of the IT sector,” Gunawardena has said.
The relevant Cabinet paper was submitted by Sri Lanka’s President Gotabaya Rajapksa at the first Cabinet meeting of his government.
Gunawardena has further noted that all public and private sector workers have been completely released from the Pay As You Earn Income Tax (PAYE Tax) and all persons who earn an income of more than Rs.250,000 will be subjected to the Income Tax.
He has noted that the maximum tax on income has also been reduced from 24 percent to 18 percent and three tax rates have also been introduced at 6 percent, 12 percent and 18 percent from the tax free ceiling of Rs.250,000.
“With the abolition of the Withholding Tax on interest income, fixed deposits and all the other savings accounts including children’s savings accounts interests will be excepted from this withholding tax,” Gunawardena has added.
OSL take:
The decision of the government of Sri Lanka to exempt the country’s IT sector from all taxes would provide the sector a massive boost. Sri Lanka’s IT sector is already recording a continuous growth and the latest policy decision would further boost the sector and expand the business/investment opportunities in Sri Lanka’s IT sector.
| Article Code : | VBS/AT/03122019/Z_3 |