Colombo (News 1st) – The government’s controversial new tax law, the Inland Revenue (Amendment) Bill, was passed in Parliament on Friday (9th) with 79 votes for and 36 against, with only a few minor amendments.
The new tax regime will impose an extraordinary maximum 36% tax bracket on monthly income, with the lowest bracket starting at 6% for those earning over Rs. 100,000/- per month. The only amendment of importance appears to be that the new personal income tax will come into effect from 1st January 2023 and not from 1st December 2022 as originally intended.
The new taxes have been roundly criticised by the country’s professionals, the Opposition, and economists, who fear that it would exacerbate the massive brain drain that is causing further crises for a nation already battered by bankruptcy caused by massive government mismanagement and corruption, with no end in sight.
Monthly income of up to Rs. 100,000/- will be free from tax. A person who earns Rs. 350,000/- a month will be subject to all six tax brackets and will have to pay a tax of Rs. 52,500/- per month.
A division was called for the Third Reading of the Inland Revenue (Amendment) Bill by the Opposition to which 79 votes were cast in favor of the Bill and 36 votes were cast against it.
The Value Added Tax (Amendment) was also passed in Parliament with amendments.
