9 February 2023 01:40 am Views - 670
The government yesterday offered relief by exempting some non-cash benefits received by employees as part of their total package of benefits and emoluments when computing the Pay-As-You-Earn (PAYE) tax.
This was in response to the public outrage that has been growing since the start of the year from when the government raised the personal income tax rate to 36 percent for the highest income bracket.
In a circular issued by the Inland Revenue Department, under the instructions from President Ranil Wickremesinghe, in his capacity as the Finance Minister, the government had decided to exempt some non-cash benefits, which become part of the PAYE calculation.
These include the value of company shares or the share options offered by employers, value of residence provided, allowances for transport facilities, which include vehicles, drivers and fuel, value of the telephone allowances and concessionary rate loans obtained by employees.
This circular was issued to coincide with Wickremesinghe’s policy statement in Parliament, yesterday morning.
The circular will apply from January 1 and therefore, those entities that had already computed and deducted PAYE different to the revised terms under the circular are instructed to adjust the difference immediately in the succeeding months.