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Sri Lanka’s new personal income tax structure reduces tax burden across income groups

In his recent address to Parliament, the President announced proposed reforms to Sri Lanka’s Personal Income Tax (PIT) system. These changes include raising the tax-free monthly income threshold from LKR 100,000 to LKR 150,000, a...

Tax policy proposals announced by the president on 18 Dec 2024

In his parliamentary speech on December 18, 2024, the President announced key tax policy changes: Personal Income Tax (PIT): The tax-free...

Sri Lanka’s higher tax rate and lower revenue collection

Sri Lanka's Corporate Income Tax (CIT) collection is notably lower than other South Asian countries, despite having a higher tax rate. In 2023, Sri Lanka’s CIT revenue collection was 2.0% of GDP, with a CIT rate of 30%. ...

Sri Lanka’s generous tax-free personal income tax threshold

Sri Lanka has the highest tax-free income threshold in South Asia – without the Maldives. Citizens are exempt from paying income tax unless they earn over LKR 1.2 million annually (LKR 100,000 per month). In comparison, neighbouring co...

Sri Lanka’s quick climb to the top personal income tax rate

Sri Lanka imposes its highest tax rate at a relatively lower income threshold compared to other South Asian countries. Individuals earning over LKR 308,333 per month are subject to a steep 36% tax rate, making Sri Lanka the fastest in the re...

Disparity in personal income tax burden on lower and higher income levels

Sri Lanka's personal income tax burden varies significantly between lower and higher income levels. At lower incomes, particularly for those earning below LKR 250,000 per month, the tax burden—measured as the percentage of income p...

‘Asset Declarations Penalty Calculator’ launched by Verité Research

The Anti-Corruption Act No. 9 of 2023 introduces strict requirements for politicians and certain public officials to submit annual declarations of their assets and liabilities. The annual declaration should reflect the assets and liabilities...

Sri Lankans enjoy most tax-free income in South Asia, but face highest tax fastest

The comparison of Sri Lanka’s personal income tax structure with its South Asian peers reveals three key findings. One, Sri Lanka has the highest tax-free income - that is, the minimum income before taxes are applied. Two, Sri Lankans...

2023 Budget's revenue target missed by LKR 382 Bn

The Ministry of Finance Annual Report, released on 31st May 2024, shows that in 2023, total revenue including grants fell short of the Budget target by LKR 382 billion or 11%. In 2023, actual total revenue and grants amounted to&n...

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