Sri Lankan government to impose IMF dictated taxes
By
Saman Gunadasa
4 August 2017
The Sri Lankan government tabled a new bill early last month designed to expand its tax income. The proposed taxes, which have been effectively authored by the International Monetary Fund (IMF), will increase the economic burden on workers, small businesses and the self-employed while providing more concessions to big business. The bill is expected to be passed later this month
Finance Minister Mangala Samaraweera told a press conference on July 21 that everyone over the age of 18 years should have a taxpayer number “regardless of whether he or she had to pay taxes or not.” In a crude attempt to deflect opposition to the new measures, State Minister of Finance Eran Wickramaratne told the same media event that the government would not tax the poor but then insisted that “everybody must pay tax.”
The government proposals include:
* Every resident or non-resident’s annual income, whether from employment, business, investment or other sources and starting at 600,000 rupees per year or 50,000 rupees (about $US300) per month will be taxed. This starts at 4 percent on annual incomes of 600,000 rupees and climbs to 24 percent for 3,000,000 rupees or more per year.
While the average monthly income for workers is around 15,000 rupees per month, state employees and bank workers, as well as some private sector workers, receive around 50,000 rupees or more per month. Many workers also have second jobs in order to cope with Sri Lanka’s rising cost of living.
* All pension funds, including the Employee Provident Fund (EPF), above a total lump sum payout of 2,000,000 rupees will be subjected to taxes of 5 to 10 percent. Almost all other payments, including employee compensation, termination…