Sri Lanka expects to open income tax files to doctors, lawyers, and tuition teachers as the first stage of the Government’s proposal to open income tax files to citizens over the age of 18  to broaden the tax base, State Minister of Finance Ranjith Siyambalapitiya said.

Speaking in Parliament yesterday (23), the state Minister said that the Government is expecting to open income tax files to communities in the society which is perceived to have the capability to pay income taxes as the first stage of the proposal brought budget 2023 to open income tax files to citizens above 18.

“We are ready in the first stage to introduce a tax file to them, it can be doctors, lawyers, and tuition teachers, as the communities who are highlighted,” he added.

Due to the tax cuts of 2019, Sri Lanka’s income tax base was reduced from 1.5 million at the end of 2019 to 409,000 by the end of 2021.

According to the Inland Revenue Department (IRD),  the total revenue from the Advance Personal Income Tax from January to March amounted to  Rs. 25.5 billion, achieving the 25% of the annual target of Rs. 100 billion.

In January, IRD collected Rs. 3.1 billion from the tax, while the revenue climbed to Rs. 10.5 billion and Rs. 11.9 billion in February and March, respectively.

Moreover, the State Minister said that in the second stage, an income tax file will be introduced to the rest who are over 18 years of age.

“But it does not mean that everyone with tax files should pay taxes to the Government,” he clarified.

Further, he said that the Finance Ministry is preparing a policy plan to be presented by July 1 to President Ranil Wickremesinghe with plans for revenue generation in the next five years.

“Under that (policy plan), the first point is to expand the tax base. While doing that, our other plan is to systematically reduce the stress on the current taxpayers,” Siyambalapitiya said.