The Inland Revenue Department (IRD) is yet to receive formal notification regarding the changes to Withholding Tax (WHT) and Pay-As-You-Earn (PAYE) Tax announced by President Anura Kumara Dissanayake in Parliament last week.

“Until we receive official communication, the IRD cannot provide detailed guidance or implement the proposed changes,” IRD Commissioner General Sepalika Chandrasekara stated.

Meanwhile, Deputy Minister of Finance Harshana Suriyapperuma explained that the proposed changes were set to take effect after the approval of the budget for 2025.

The announcement on the new PAYE Tax threshold has sparked mixed reactions, with critics claiming it imposes a greater burden on the majority. 

However, Suriyapperuma dismissed such criticisms as baseless, emphasising that the revised policy would benefit the majority of taxpayers by ensuring lower contributions for those with moderate incomes.

When asked if the proposed changes would lead to an increase or decrease in tax revenue, Chandrasekara refrained from commenting, citing that she had not analysed the proposed changes yet.

Speaking to The Sunday Morning on how these changes would impact Government income, Ceylon Chamber of Commerce Chairman Duminda Hulangamuwa said: “The impact of raising the income threshold from Rs. 100,000 to Rs. 150,000 can be set off by the WHT increase from 5% to 10%. Although fewer people will now be paying tax, those who pay will be paying higher taxes. Therefore I do not think there will be a significant impact on tax revenue.”