Cabinet approves relief for low-income depositors affected by withholding tax

20 May 2025 01:00 pm Views - {{hitsCtrl.values.hits}} 11 Bookmark

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Colombo, May 20 (Daily Mirror)- The Cabinet has approved a proposal to provide relief to low-income individuals affected by the recent increase in the withholding tax rate from 5% to 10%, introduced under the Inland Revenue (Amendment) Act No. 2 of 2025, effective from April 1, 2025.

The revision has led to witholding tax being charged even on individuals earning less than Rs. 1.8 million annually—the threshold for tax liability—causing financial hardship for low-income earners and small-scale depositors.

As a remedy, President Anura Kumara Dissanayake in his capacity as Minister of Finance, Policy Planning and Economic Development, proposed the introduction of a self-declaration mechanism. This will allow individuals earning below the tax-free threshold to declare their income and be exempt from the increased witholding tax on interest income.

Additionally, the Cabinet approved amendments to the Inland Revenue Act No. 24 of 2017, which will make it mandatory to provide a Tax Identification Number (TIN) when opening any type of bank accounts.

Comments - 11

Simon Tuesday, 20 May 2025 01:24 PM

Excellent and far reaching action to prevent corruption as all transactions through Banks monitored. Of course the corrupt will still say Govt not doing anything as the corrupt will be badly affected.

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Daranagama Tuesday, 20 May 2025 02:12 PM

TAX at source is the best practice to net the defaulters. Hence, WHT is a timely solution. Accordingly, complete waiver of WHT upto Rs.1.8 m thresould of annual interest income earners, will be a sizeble effect to the Govt. revanue. Best solution is a sliding scale of WHT deductions at source commencing may be from about 3% rising up to about 12%.

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Kandaih Balendran Tuesday, 20 May 2025 01:37 PM

Road sweepers and labourers will have to pay a big amount to a tax consultant to get a TIN. Pacha Kumara harassing ordinary people while oligarchs play stock market tax free.

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TinTin Tuesday, 20 May 2025 02:13 PM

But IRD dead in issuing TIN. Online registration not possible, and e-mail clarifications go unanswered.

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Gajendran Tuesday, 20 May 2025 05:46 PM

IRD chasing after small fish, big tax evaders are giving bribes and getting away with the help of their audit/accounting firms.

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Ghaus Tuesday, 20 May 2025 02:35 PM

Why can't the banks charge 10% WHT from those who earn 1.8 M interest income per year, rather than charging it from everyone? I think the software used by the banks can easily track those who earn more than 1.8 M.

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Sunil Watagala Tuesday, 20 May 2025 08:02 PM

What a stupid comment.!! Do you think a single bank is aware about the investment of their customers in other Banks / Financial Entities?

2 4

Kandaih Balendran Wednesday, 21 May 2025 10:00 AM

Central Bank Financial Intelligence Unit (FIU), there is something called digitalisation, dummy.

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Ghaus Thursday, 22 May 2025 03:56 PM

You are trying to be stupid. CBSL can everyone's deposits, loans and large amounts of funding movements. They can easily track anyone's monthly or yearly deposits. Why are they using CRIB, KYC, etc? All commercial banks should report their financial transactions to the CBSL daily basis.

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Senior citizen Tuesday, 20 May 2025 02:54 PM

Thank you very much Mr president and the government

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DPerera Tuesday, 20 May 2025 02:58 PM

Proper solution would be IRD to immediately refund excess tax collected at the end of the financial year. Without doing the proper thing, govt has been taking various band-aid solutions which are leading to more and more problems. With the self declaration anyone can make a false declarations saying his/her income is less than Rs. 1.8m and evade paying taxes.

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