• Welcomes Govt.’s  decision to increase Withholding Tax

The Opposition party Samagi Jana Balawegaya (SJB) welcomed the Government’s decision to increase Withholding Tax while raising concerns over its plans to address the revenue gap caused by the reduction of PAYE Tax.

Speaking to The Daily Morning yesterday (22), SJB Opposition Parliamentarian (MP) Kabir Hashim stated that increasing the Withholding Tax would be a productive measure to fill the revenue gap created by the PAYE Tax revision. However, he emphasised that the Government must explore other alternatives to ensure revenue stability.

He further noted that the SJB is currently reviewing the potential repercussions of the Government’s tax revision. Commenting on the Withholding Tax increase, the MP said: “We have no objection to this. Even we (SJB) proposed this. Some people who deposit money in Fixed Deposit (FD) accounts receive large sums without being brought under the tax net. Yet, the SJB proposed relief measures for the FD accounts of senior citizens,” he stated.

Hashim also claimed that the tax revision announced by the President in Parliament is a continuation of policies initiated by former President Ranil Wickremesinghe. “They (National People’s Power) proposed even greater thresholds. They suggested a threshold of Rs. 200,000. But now they have introduced what former President Wickremesinghe proposed. That is very absurd. We (SJB) did not propose any change to the PAYE Tax threshold. Instead, we proposed changes to the tax rate, which is more effective. We promised a revision of the current income tax structure to make 24% the maximum personal income tax rate. Additionally, we presented a clear plan to address the revenue gap that could arise from these changes,” he added.

However, he stated that while the SJB has no objection to reducing the PAYE Tax, as it is a need of the people, the Government must find effective solutions to meet its revenue targets.

Last week, President Anura Kumara Dissanayake announced in Parliament that the PAYE Tax exemption limit has been increased from Rs. 100,000 to Rs. 150,000, while the Withholding Tax has been raised from 5% to 10%, following discussions with the International Monetary Fund (IMF) during the third review. “We have held discussions and were able to raise the tax threshold from Rs. 100,000 to Rs. 150,000 per month,” President Dissanayake said.