Sri Lanka’s Inland Revenue Department said it will cut income taxes on alcohol, tobacco, gambling, manufacturing and financial industries from April 1, 2020. Income from liquior, tobacco, and gambling, which were previously taxed at 40 percent, will now be charged at 28 percent.
Trading, banking, finance and insurance will be charged at 24 percent, compared to the earlier 28 percent. Manufacturing will be taxed at a new rate of 18 percent, down from the earlier standard rate of 28 percent.
Meanwhile, exports, tourism, education, health, construction and agro-processing industries will be taxed at 14 percent.
Withholding tax on interest income will be exempt for income of up to 250,000 rupees a month with effect from January 1, 2020, while all interest income will be exempt from withholding tax from April 2020.
Withholding taxes on dividends, charges, natural resource payments, rent, royalties, premiums and retirement payments for residents will be removed, and become a part of the assessable income for taxes from April 1, 2020.
Withholding taxes on partnerships have been removed, and partnership tax will be 6 percent for income over 1 million rupees annually.
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