Companies hurry bonus payments to beat taxes
View(s):Several Sri Lankan companies have paid bonuses to employees due in April, a few weeks ahead (in March) in an effort to beat the impending tax hike. The maximum personal tax has gone up to 24 per cent from 16 per cent and was to be effective from April 1. However the above mentioned tax, similar to many other taxes proposed in the budget, has been delayed as the government was unable to bring the necessary amendments to Parliament in time.
On Wednesday, the Inland Revenue Department (IRD) informed the private sector that the termination of the Simplified VAT, as announced in Budget 2017, will not happen as scheduled on April 1 and instead SVAT will continue until “the necessary legislation is in place”, a move that was welcomed by the Ceylon Chamber of Commerce.
Tax proposals in the budget not being implemented on time (either in January or April) have been an issue in 2015, 2016 and now 2017.Among taxes affected by amending legislation being delayed are the With Holding Tax (WHT) on interest income; corporate income tax, PAYE, ESC, VAT, NBT, Financial Transactions Levy, Capital Gain Tax and Carbon tax.