Amendments to PAYE tax in upcoming budget: Parliamentary Committee assures

13 September 2023 01:36 pm Views - {{hitsCtrl.values.hits}} 21 Bookmark

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The Sectoral Oversight Committee on Alleviating the Impact of the Economic Crisis has assured to intervene in taking necessary measures to present amendments to the Pay As You Earn (PAYE) tax in the upcoming budget.

The assurance was given by Parliamentarian Gamini Waleboda as committee chairman during a discussion with several trade unions representing the professionals affected by the tax revision process.

The trade union representatives expressed their opinions at length on what is expected from the tax amendments and whether the objectives have been achieved.

The representatives said that many professionals have been affected by the amendments to the PAYE tax during the tax reforms.

Finance Ministry officials who participated in the discussion pointed out that the government is still below the expected revenue targets this year through the PAYE tax revision.

However, the officials said that efforts are being made to provide relief to the affected professionals due to the tax revision.

Officials of the Inland Revenue Department stated that a special programme has been started to add persons who are not involved in the tax process. Accordingly, a new taxpayer group registration programme (Bulk Registration) has been planned to start this week.

The committee acknowledged the seriousness of the problem to the extent that professionals are leaving the country due to the tax issue. The committee, therefore assured the trade union representatives that the Government and the International Monetary Fund (IMF) will be strongly urged to resolve this issue.

The chairman pointed out the importance of preparing a policy on how taxes should be imposed for each profession and turning it into a legal document through Parliament in the future or when tax revisions take place.

Accordingly, the chairman instructed the representatives of the relevant trade unions to prepare a report on the revisions to be made to the PAYE tax within two weeks and submit it to the committee. (Ajith Siriwardana)

Comments - 21

Chrish Wednesday, 13 September 2023 02:06 PM

If the government can consider increasing the 100,000 tax free tresh hold to at least 225,000 from April 1st 2024 it will help the young ones who are struggling the most. The 36% tax bracket is something anyone will pay even if you go overseas to a developed country. In addition consider having medical insurance policy age limit increasing to at least 75 years as many who stayed back in Sri Lanka did so to look after the parents. Currently over 55 - 60 years no hospital and surgical covers available. Increasing hte paying wards in govt hospitals is also good.

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Is it then to increase VAT if PAYE not raising enough revernue Wednesday, 13 September 2023 06:44 PM

Government is without funds for Health and pay the massive Army salary. You propose how to get the lost revenue. Increase VAT or how? Money does not go on trees, it is collected from tax payers or duties on imports.

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Bradley Wednesday, 13 September 2023 02:10 PM

PAYE (or APIT) Tax payers are mostly private sector employees and they are facing the most hash impacts of the economic situation apart from been anxious about their own companies struggling to survive. Please increase the tax free limit to 250,000 for all PAYE tax payers rather than doing it only for the professionals.

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Gune Wednesday, 13 September 2023 03:08 PM

What is wrong with taxing people? Those who migrate have to happily pay taxes in those countries as those developed countries have very effective systems and no eacapes. No one can be free from paying taxes if you are working. SL should have had such a system very long time ago. When you look at these crying professionals' look at the wealth, their houses and cars they drive, question how do they earn such money without paying g taxes?

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Sam Silva Wednesday, 13 September 2023 05:43 PM

Very true. Again as per ird there are billions in areas that they are unable to collect and crying about it. Why can't they take some stern action, starting from freezing their bank accounts and forfeiting their assets.

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Chicoo Wednesday, 13 September 2023 03:17 PM

Aiyoo! So how are the politicians going to fund their overseas trips? From their personal funds?

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rajith Abey Wednesday, 13 September 2023 05:16 PM

Answer to Gune, I am a Surgeon in UK and my annual pay before tax is GBP 125000. 41% will be taxed. In sri lanka a surgeons annual salary is LKR 3 million. when 36% is taxed what is left for him?

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Dee Wednesday, 13 September 2023 10:45 PM

There is no flat out 36% tax. It’s in slabs ! Even a person who earns 1.5 mil a month will not be paying 36% on the entire 1.5 mil. It’s like a house which consumes 25 units of power a month saying they pay 75/- per month it!

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Wimal Sirinaga Wednesday, 13 September 2023 05:17 PM

Hope Pin MPs will also pay. I am sure that their salaries will be compensated vey Paga and Kappam!

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Cabraal Wednesday, 13 September 2023 06:00 PM

Because of the excessive personal tax imposed from January 2023, hundreds of Professionals and others have left the country. By revising the tax now, will all those who left make a decision to come back?

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Mohamed Haniffa Mohamed Azmi Wednesday, 13 September 2023 08:31 PM

Whether it's Government Sector, Private, Professional or non professional, we should have a equal taxing system. The threshold can be made higher if it's felt appropriate to balance the purchasing powers. High income earners through fees, should be handled with more taxes under those respective industries justifying those kinds of income to taxes.

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Lakshman Nandasiri Wednesday, 13 September 2023 08:37 PM

I think tax free allowance should be increased. Present income tax files is below 50000 according to 2022 IRd report. This tax payers should be increased. Most of people having idea of opening of tax file is duty of IRD. Government should implement a system Tin is compulsory for any government services like NIC driving licence bank account business registration etc

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Ah Wednesday, 13 September 2023 08:43 PM

A tax threshold could be increased to 1,800,000 with a monthly earnings of Rs 150,000 if the cost of living had reduced at the same pace of inflation. But at current situation Please consider an annual threshold of Rs 2,100,000 (monthly 175,000). This could be of some relief to the middle class.

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Ah Wednesday, 13 September 2023 08:50 PM

The tax computation must be made simpler. With a minimum tax threshold of Rs 2,100,000 (monthly Rs 175k), the taxable rate must be first 750,000 @ 5%, second 1000,000 @ 10% and thereafter 17.5%

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Professional Wednesday, 13 September 2023 09:39 PM

All western countries tax from the very first dollar earned. There are no tax exempt thresholds. Only concession is in mid east where social life is nil.

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Think Wednesday, 13 September 2023 10:20 PM

If they are happily paying tax abroad equally they are getting benefits. Here we pay tax, politicians live happily.

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Nandasiri Thursday, 14 September 2023 12:10 AM

Our monthly pension bill 25,000,000,000.and most of people need every single thing free. They are not thinking how is money comes to government. Politicians also need to give free to people. But few people to contribute. See the amount of income tax files of Sri Lanka. I think if you passed the exam and earn something is now become unnecessary task. Every body pay some taxes then people become more responsible and accountability. Other thing is every service should be distributed to cost plus method. Ceb should sell one cost to every person such as petrol. Railway is Other issue. Salary bill 8 bl.Over time near 4 bl .income 3 bl. 10 times per year strike.

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Nilmini Thursday, 14 September 2023 07:18 AM

People leaving country because of tax is not fully accurate. All countries have taxes and many more than our threshold. The problem is lack of policy in tax collections and adherence. Thereby more and more taxes are pinned on people who are paying. If the tax collections happens properly from all taxable individuals the threshold can surely be improved in Sri Lanka.

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Theji Thursday, 14 September 2023 11:25 AM

In my view govt should bring down the Rs 100,000 tax free bracket to Rs 50,000, reduce the tax rates on slabs and increase the number of slabs.

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Alpha Monday, 18 September 2023 03:14 PM

Taxation is not equitable. Only employees get caught by the PAYE. Everybody else evades or avoids. Others like Companies, doctors, lawyers, tuition masters and accountants and also self employed increase their prices, fees etc. to compensate for the additional taxes. Companies always report "Profit after Tax" All direct taxes are passed on to the public. The best form of tax is the indirect tax. VAT is too complicated. We should revert to BTT, Wealth Tax and Expenditure tax. Savings in Banks should not be taxed as they provide the funds for development. IRD is corrupt and always harassing the honest tax payer. At least for the next few years all Returns should be accepted without question. This is the way to go if we are to get out of this mess.

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Alpha Monday, 18 September 2023 04:19 PM

Money in anybody's hands will be spent, invested or saved. If spent, it will add to the tax revenue and also help economic growth. If invested it will grow the economy. If saved in Banks, cash resources will increase and interest rates will drop helping economic growth. We should therefore scrap income tax and introduce indirect taxes targeting the wealthy such as fuel tax, entertainment taxes etc. plus wealth taxes to be collected from property and vehicles through Local Councils and the RMV, CEB etc by using Property Taxes and Revenue Licence and monthly bills as the means for collection. Revenue figures will become easily predictable and achievable. The means of collection will be fair and equitable. People who cannot spend due to low disposable incomes will not be liable. Scrapping Income Tax will reduce prices and COL significantly. It is time to think out of the box to be fair and equitable to everybody and reduce corruption significantly..

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