The maiden budget of the United National Party led National Government was presented today by Hon. Ravi Karunanayake, Minister of Finance. This was geared towards increasing the Government tax revenue without causing hardship to majority of the tax payers and ensuring sustainable economic growth of the country.
The Micro and SME sector, Agriculture sector and investment promotion are primary areas focused in the 2016 proposals.
The salient features of the tax proposals have been summarized in this memorandum as a guide. These may be subject to changes at the time of legislation.
Therefore, any conclusion or decision should be arrived at only after due consideration and consultation.
Key highlights include:
>> Streamlining of Corporate tax at 15% and 30%
>> Flat rate for individual taxation 15% subject to increased tax free allowance of Rs. 2.4 Mn
>> Increase of VAT to 12.5% for service providers
>> NBT rate doubled to 4%
>> ESC for profit making companies
For additional information and guidance on the proposed changes, the Tax and Business Advisory Services of SJMS Associates will be pleased to assist you.