SL kicks off tax reform process to boost revenue

The Prime Minister’s Office announced today a series of tax reforms that will be implemented within the year. 

Implemented with immediate effect are revisions to the Value Added Tax (VAT) and the Telecommunications Levy.

Accordingly, the VAT rate has been increased from 8 percent to 12 percent, which will bring in an estimated additional revenue of Rs. 91 billion for the year 2022.

The Telecommunications Levy has been increased to 15 percent from 11.25 percent. The revision is expected to bring in additional revenue of Rs. 3 billion for the year 2022.

Further reforms will be implemented from 1 October 2022, some of which include reducing personal income tax relief, reducing the tax slab on taxable income, making Withholding Tax on Employment Income Tax mandatory, and increasing the Corporate Tax Income rate from 24 percent to 30 percent.