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Capital gains tax to be reintroduced

5 March 2016 08:30 am - 26     - {{hitsCtrl.values.hits}}

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After taking stock of the economy in the backdrop of the uncertain global environment, the Cabinet, at a special meeting yesterday, approved new tax reforms including the introduction of Capital Gain Tax to arrest the gradual decline of state revenue.

Prime Minister Ranil Wickremesinghe submitted a paper at the special Cabinet meeting held in this regard with in-depth reference to the present status of economy. The tax reforms are also intended to generate resources to meet budgetary requirements.

As for the non corporate income tax and corporate tax, the Cabinet proposed to suspend the 2016 budgetary proposals and continue the rates introduced for 2015.

Asserting that Capital Gains had not been taxed since 1987, the government decided to reintroduce it. In the paper, it is observed that the last decades have seen massive gains in private capitals among the higher echelons of society.

Also, it is proposed to keep the Nation Building Tax at the rate of two per cent reversing the budgetary proposal to increase it to four per cent. Instead of having different rates of VAT, a single rate of 15 per cent is proposed. Besides, exemptions on telecommunications, private health and private education will be removed as proposed in the paper.

The government intends to increase its revenue to 13.5 percent of the GDP. The total expenditure and net lending will be at 19 per cent of GDP. The budget deficit is slated to drop to 5.4 per cent.

Parliament will be notified once a month on the progress of implementing these taxes. A three member committee including the Treasury Secretary will oversee the implementation of tax reforms. (Kelum Bandara)

 


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  Comments - 26

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  • rosebud Saturday, 05 March 2016 03:32 PM

    Reduce waste and trim the budget - eg. public service education transport health sector and ports subsidies etc etc. Resolve to run at a profit and give up welfare state mentality. via DM Android App

    K.Senaratne Sunday, 06 March 2016 09:38 AM

    Increase in taxes was recommended by local economists as well as ADB, IMF,Fitch,Moodys

    Podda Sunday, 06 March 2016 08:36 AM

    Well yeah food is more important that keeping SL from going bankrupt

    Poddq Sunday, 06 March 2016 08:35 AM

    Yes we are enjoying this. Now we can finally get out of the debt trap and develop

    Rohan Sunday, 06 March 2016 06:46 AM

    No need taxing if govt stop wasting.

    ruwa Saturday, 05 March 2016 08:33 PM

    Incapable government..wada bari Tasanla... via DM Android App

    Citizen Saturday, 05 March 2016 05:51 PM

    Are these the only great decisions taken by the Cabinet on 04th March.We expected something revolutionary following Ranils recent lament that the rich are becoming richer and that most of the revenue collection is from the 80% poor people of this country. via DM Android App

    saman Saturday, 05 March 2016 05:33 PM

    Tax, tax more tax! We may struggle to put food on the table but who cares YR is in the prison.

    reel Saturday, 05 March 2016 05:21 PM

    When is the Parliamentary election ?await for that

    Sharon Saturday, 05 March 2016 04:08 PM

    Reduce number of Ministers as well. This is what we voted for via DM iOS App

    Missaka Saturday, 05 March 2016 03:48 PM

    This government is incompetent in handling economic situation of the country. First step to curb the recession is to cut down number of ministers and their expenses. Secondly, make the government sector institutions to profit making bodies, other than those service sector institutions.

    Ravi Saturday, 05 March 2016 03:37 PM

    Nice RM there is no difference between you and NM era of Srimawo you are doing Open economy inside Close economy ha ha ha .... all who work hard to bring RM to power enjoying this ha ha ha ...horayyyyyy!!!!!!!

    Nadeeshan Saturday, 05 March 2016 03:33 PM

    Government is playing with stock market, discouraging investments but ll loud on foreign funding. What a development strategy

    Sapu Saturday, 05 March 2016 09:54 AM

    shouldnt rush for capital gains tax, lets start from 1-2%. Increasing revenue is useless without reducing bloated public sector

    Premalal Saturday, 05 March 2016 02:00 PM

    Please read the KPMG world tax survey.

    Sene Saturday, 05 March 2016 01:56 PM

    Rich use private hospitals not poor

    Kithsiri Saturday, 05 March 2016 01:55 PM

    Certain countries do reduce VAT for healthcare but thats all

    Sapu Saturday, 05 March 2016 01:38 PM

    Private hospitals make a lot of profit and most of their customers are rich while poor have to go to low quality public hospitals

    Sapu Saturday, 05 March 2016 01:37 PM

    Most countries do have VAT for private and in some even public hospitals. Nothing wrong with private hospitals

    Premalal Saturday, 05 March 2016 12:52 PM

    Mr Kithsiri can you name the country which tax the sick? Do you think it is morally defensible to do so?

    Kithriri Saturday, 05 March 2016 12:02 PM

    Other countries have VAT for Private hospitals as well. A nearly bankrupt country like SL cannot ignore them

    Premalal Saturday, 05 March 2016 11:42 AM

    And Education

    Citizen Saturday, 05 March 2016 11:02 AM

    As planned reduce the cabinet to 25 and cut down drastically the perks and facilities of ALL ministers and ministries. Reduce drastically the salaries of all ministers and one small car to a minister. Stop completely the globe trotting of Prez on poor mans purse. What has he wrought so far0. via DM Android App

    gayan Saturday, 05 March 2016 10:38 AM

    Tax on health

    Top Cat Saturday, 05 March 2016 10:14 AM

    The global economic environment was the same at the time of the presentation of the budget. The budget was made by use a simple 4 fiction calculator with no "AC" button. The Finance Minister is not suitable for this job has to be removed before further damage is done.

    Lal Saturday, 05 March 2016 10:13 AM

    SL has one of the lowest tax revenues per GDP in the world. We also need to end tax evasion by rich


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