Inland Revenue Commissioner General Kalyani Dahnayake remained tight-lipped over the suspicious reversal of the March 28 circular issued by her department which sets out the guidelines for the implementation of the income tax proposals in the 2016 budget.
Inquired by the Daily News, the commissioner reluctantly said that 'there had been a mistake and hence it had to be withdrawn'. asked if the circular would be re-imposed, she declined to comment.
Referenced as SEC/2016/4 the circular which was initially removed from the Inland Revenue Department website has been posted under the title 'Implementation of the Proposals on Income Tax and Revision of
proposals made to the amendment of the Inland Revenue Act No10 of the 2016 budget is dated March 28th. The circular which details the tax proposals made by the 2016 budget was meant to come into effect from 1st of April.
Accordingly the circular cites that corporate income tax applicable for the Banking, Financial Services and Insurance sector would be 28% and Liquor, Tobacco, Lottery, Betting or gaming would be at 40%. Income tax on other sectors than this would be at 17.5%. On Non-corporate Income Tax, the circular stated that progressive income tax, tax deductions, exemptions on profits from employment currently applicable on personal income tax including Pay-As-You-Earn (PAYE) tax would be continued. The maximum income tax rate applicable on individuals on the profits on Banking, Financial services, Insurance, Liquor, Tobacco, Lottery, Betting and gaming would be 17.5%.
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