Cabinet clearance for 25% Surcharge Tax Bill

The Cabinet has cleared the draft Surcharge Tax Bill, which would impose a one-off 25 percent surcharge tax on individuals or companies with over Rs.2 billion income for the 2020/2021 financial year. Finance Minister Basil Rajapaksa sought the approval of the Cabinet of Ministers on Monday for the draft bill prepared by the Legal Draftsman to be published in the government gazette and thereafter submit it to Parliament for approval.

The surcharge tax was one of the revenue proposals in Budget 2022, which aimed at bringing in Rs.100 billion to State coffers.
“The Budget 2022 proposes to impose a one-off 25 percent surcharge tax on individuals or companies earning taxable income more than Rs.2000 million for the assessment year 2020/2021. 
The Attorney General’s clearance has been received for the Surcharge Tax Bill prepared accordingly by the Legal Draftsman,” The Government Information Department noted.
According to Minister Rajapaksa, the proposed one-off tax would only be applied to 62 large companies.
However, business leaders and chambers had warned that the retrospective tax could dampen investor confidence