Tax policy proposals announced by the president on 18 Dec 2024

Abstract

In his parliamentary speech on December 18, 2024, the President announced key tax policy changes:

Personal Income Tax (PIT): The tax-free threshold will be increased from LKR 100,000 to LKR 150,000.

Personal Income Tax (PIT): Adjust PIT rates to provide largest savings for those with incomes under LKR 350,000. Withholding Tax (WHT): The rate will be increased from 5% to 10%.

VAT Exemptions: Locally produced yogurt and other dairy products will be exempted from Value Added Tax (VAT).

Tax on export of services: The tax exemption will be removed, and a concessionary rate of 15% is proposed to be charged.

It is worth noting that Verité Research has advocated for increasing the Withholding Tax (WHT) to 10% to promote fairness and efficiency in Sri Lanka's tax system. To explore our recommendations on WHT, visit the 'Related Source' URLs given below.