14 December 2023 10:01 am Views - 482
The International Monetary Fund (IMF) Senior Mission Chief for Sri Lanka, Peter Breuer, said during a virtual press conference yesterday that discussions are progressing between the IMF and the government regarding the implementation of a property tax in 2025.
Breuer further mentioned that the Fund has been actively providing technical assistance to Sri Lanka in this matter.
While acknowledging that implementing such a tax is a very long and complex task, Breuer said it will be an important source for raising additional revenue for the government in 2025.
According to the programme documents, Sri Lanka has assured the IMF to revamp the property tax system and introduce a wealth transfer tax by 2025.
The country has also committed to introduce a gift and inheritance tax, with a tax-free allowance and minimal exemptions.
“In particular, we will introduce a nationwide real property tax and adjust the system of transfers between the central and provincial governments.
“We will also introduce a gift and inheritance tax with a tax-free allowance and minimal exemptions. Preparatory work for these tax reforms will commence by mid-2024, supported by IMF technical assistance,” IMF Programme documents made public in March said.
No comprehensive study has been conducted on the Sri Lankan property market up to now. The majority of property transactions in Sri Lanka involve inheritance and gifts.
“We will also introduce a gift and inheritance tax with a tax-free allowance and minimal exemptions. Preparatory work for these tax reforms will commence by mid-2024, supported by IMF technical assistance,” IMF Programme documents made public in March said.
No comprehensive study has been conducted on the Sri Lankan property market up to now. The majority of property transactions in Sri Lanka involve inheritance and gifts.
President Ranil Wickremesinghe recently called for a systematic property valuation cycle, to enhance Sri Lanka’s tax system. He proposed that assessments be conducted every five years, emphasizing the positive impact such evaluations can have on tax collection.