The Government yesterday Gazetted the new income tax structure, introduced in the budget 2017, while introducing an investor incentive scheme, which provides new concessions to investors.
Minister of Finance Ravi Karunanayake said the new tax structure would come into effect, when the Gazette notification was approved by Parliament.
The corporate tax system will be simplified to 3 tier rate structures under which Small and Medium Enterprises, export of goods and service, local IT industry, manufacturing furniture, education, tourism, fisheries, renewable energy, freight forwarding, EPF, ETF, Pension Funds and Charitable institutions, will be subjected to a concessionary rate of 14 percent.
Banking, finance, insurance, manufacturers and traders will be subjected to standard Corporate Tax rate of 28 percent and liquor, tobacco, betting/gambling will be subjected to a higher Corporate Tax rate of 40 percent.
According to the Gazette Notice several areas of businesses such as hub activities (Entire Port, international logistics) export of IT, export of gem and jewellery, solid-waste management, agriculture, poultry, dairy and middle-income housing will be exempted from the Corporate Tax.
As per the Gazette a person will not be levied income tax if his or her annual earnings were up to Rs. 1.2 million per year and will not be liable to Pay As You Earn (PAYE) if the monthly salary was less than Rs. 100,000.
However, it was announced by the Minister that the Government had come up with an investor incentive scheme, which was formulated with an enhanced depreciation allowance for a person who incurs expenses in respect of depreciation of assets other than intangible assets.
Accordingly investments in the Northern Province less than US $ 3 million will be entitled to a depreciation allowance of 200 percent, while investments made in other areas will be subjected to a depreciation allowance of 100 percent.
However, the investments will have to be carried out within three years in order to qualify for the scheme.(Yohan Perera)
Investments between US $ 3 to 5 million and provides employment to not less than 250 persons will be entitled to 200 percent depreciation allowance, while the investments between $ 3 to 5 million in other provinces will be subjected to 100 percent depreciation allowance provided they generate 250 employment opportunities
For investments between $ 50 to 100 million there will be a deprecation allowance of 100 percent while unrelieved losses can be claimed in 10 years, while for investments between $ 100 million to 2 billion will be subjected a depreciation allowance of 150 percent while the unrelieved losses can be claimed in 10 years.
Investments over $ 2 billion will be subjected to a depreciation allowance of 150 percent while unrelieved losses could be claimed in 25 years.
Depreciation allowance of 100 percent has been given to investments more than $ 2 billion on ports developments, while unrelieved losses can be claimed in 25 years these kinds of investments will exempted from Corporate Tax up to the period, which the investment allowance is fully absorbed. The Corporate Tax would be 7 percent for the ensuing 15 years.
Mr. President, please assign him the waste management ministry.
Sunil Monday, 15 May 2017 07:25 PM
His body language says that he is going to mess this one, too. Leave as soon as you can.
Hadam Monday, 15 May 2017 04:21 PM
You really should look into previous companies that were owned by Ravi.
lankaman Monday, 15 May 2017 03:14 PM
Why impose a tax of 14% on EPF/ETF? These are funds built by mandatorily retaining a portion of employee earning. These fellows are destroying private sector employee rights
shanthapriya Monday, 15 May 2017 02:30 PM
you always come up with big ideas and end up in supreme courts and let down our beloved leader RW
shanthapriya Monday, 15 May 2017 02:28 PM
Before go that far pls introduce local consumer relief tax structure if possible. Later on we can think about other areas
joshua Monday, 15 May 2017 02:16 PM
now what happened to the IMF draft?
dham Monday, 15 May 2017 01:58 PM
What happened to your anoumous investor agreed to bring few billion via DM Android App
Sunil Monday, 15 May 2017 01:22 PM
Best FM in Asia in action!!!
Sambo Monday, 15 May 2017 09:37 AM
I am sure the president wont forget you when the cabinet re shuffle takes place.
SWOT Analysis Monday, 15 May 2017 12:25 PM
Losses may be due to Political and Economic reasons in the host country.
ANTON Monday, 15 May 2017 12:14 PM
I AM INTERESTED IN HIS SHIRT ONLY.
ceylon Monday, 15 May 2017 12:00 PM
ravi is one of few talented qualified ministers.he made great contributions for his part.lanka he has no much recognitionlanka recognise criminals and fools. via DM Android App
lkboy Monday, 15 May 2017 11:29 AM
We know who he will support.
FCCA - FCMA - FCA Monday, 15 May 2017 11:00 AM
Cannot understand - why there should be Loss ( while unrelieved losses can be claimed in 10 years, ). Investors invest to earn Profits. That means Means no proper Project Plan or Artificial Window Dressing Loss - Money syphoned out by Board of Directors
ceylon Monday, 15 May 2017 10:33 AM
stupid as allways.get advice from steave forbs to impliment flat tax.only one tax. via DM Android App
mushi Monday, 15 May 2017 10:30 AM
Some this king of structuring was the need of the hour Good Move..
asitha Monday, 15 May 2017 09:58 AM
father of all deals are you ready to loose your ministerial post?
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