President Ranil Wickremesinghe has revealed plans to provide relief for personal income tax in the near future as the government is considering adjustments to the personal income tax structure to provide relief to taxpayers, the President’s Media Division reported. 

Following the strong performance in tax revenue this year, the government has proposed to the International Monetary Fund (IMF) an adjustment in Personal Income Tax slabs from Rs. 500,000 to Rs. 720,000, aiming to provide relief to mid-level taxpayers affected by recent tax reforms, he said.

The IMF, in turn, has suggested changes, offering more relief to lower bands, similar relief for mid-level taxpayers and slightly less for higher earners, while keeping the proposal’s core intact, he said. 

The President revealed this while delivering the keynote address at the University Lecturers’ Conference held at the Water’s Edge Hotel last evening (13).

The President mentioned that two proposals, currently under review by the Treasury and the counter proposal by the International Monetary Fund (IMF) are being considered to achieve the goal of providing some benefit to the middle segments like the academia.

“We are now in the next stage of discussing tax thresholds. We have had strong economic performance this year and hope to maintain it next year. We are considering adjustments to the personal income tax structure to provide relief to taxpayers,” the President was quoted as saying.

He added that currently, there are two proposals being considered. “The Treasury’s proposal maintains a tax-free threshold of Rs. 1.2 million, widens the tax band from Rs. 500,000 to 720,000, and keeps the top tax rate at 36%. And the counter proposal by the IMF proposes that the tax-free threshold remains at Rs. 1.2 million, but the first tax band is widened from Rs. 500,000 to 1 million rupees, shifting all tax bands up by 500,000 rupees, with subsequent bands remaining at Rs. 500,000 rupees and the top tax rate remains at 36%.”

He stated that they are evaluating these proposals and working towards one that provides relief. “I am considering the IMF proposal. Our decision will be guided by what is best for the country and the people,” he said.

In his speech, delivered under the theme “Transforming Sri Lanka’s Higher Education towards a Developed Nation,” President Wickremesinghe also announced a comprehensive reform plan aimed at transforming Sri Lanka’s higher education system as a key strategy to stimulate economic recovery.

President Wickremesinghe emphasized the critical role of higher education in driving the country towards development and highlighted the need for state universities to operate with greater independence to enhance the quality of education

-Ada Derena