×

Warning

JUser: :_load: Unable to load user with ID: 10504

Saturday, 11 February 2023 23:12

Govt makes changes in PAYE tax under mounting pressure Featured

Under intense pressure, the Government yesterday announced revision to the circular on personal income tax relaxing certain incentives provided for an employee whose monthly income exceeds Rs. 100,000.

As per the revised circular issued by the Inland Revenue Department to exempt non-cash benefits of employees primarily include; company shares, residence, transport and communication facilities provided to an employee. The calculation of an employee’s gains and profits for any month commences on 1 January 2023.

The amounts to be included as benefits to be received or derived by such employee from the employment are specified by the Commissioner General of Inland Revenue (CGIR) in terms of the provisions of the Inland Revenue Act No. 24 of 2017.

The circular to this effect has been issued under the guidance of President Ranil Wickremesinghe who is also the Finance Minister. The previous circular No. SEC/2022/E/05 issued on 22 December 2022 has been annulled.

of Inland Revenue has issued a circular to exempt non-cash benefits of employees’ income from the Pay-As-You-Earn (PAYE) Tax.

For housing, the benefit, which was currently considered as Rs. 20,000 or 12.5% of the total salary for people earning less than Rs. 200,000 and Rs. 40,000 or 12.5% of the salary for people earning over Rs. 200,000, has been revised to 12.5% of the basic salary. The circular has removed the benefit of Rs. 5,000 or 2.5% of the salary for furniture.

As per the revision, the benefit has been changed to Rs. 20,000 for the vehicle, Rs. 10,000 for the driver and Rs. 20,000 for fuel, which was Rs. 50,000 and Rs. 75,000 based on engine capacity below 1800 cc and above 1800 cc respectively.

The fuel allowance was 100% taxable and it has been reduced to 25%.In addition, the benefit which was considered to be Rs. 25 per km unlimited for the private use of vehicles provided for field duties has been revised to Rs. 25 per km or Rs. 20,000 with the driver and Rs. 30,000 with the driver, whichever is the lesser.

The new amendment treats only 25% of the 100% taxable phone allowance as a benefit.

For concessional loan interests, interest benefit on loans given by employers on subsidised interest is not considered for tax.

State Minister of Finance Dr. Ranjith Siyambalapitiya says that the payment of Pay-As-You-Earn System (PAYE) tax by government or semi-government institutions for the employees will be suspended. The Minister said the related circular will be issued this week.

The Minister points out that the PAYE tax is imposed as a tax to be paid to the government by people who earn income beyond a certain limit and cases of some government and semi-government institutions paying this tax have been reported.

 

Last modified on Saturday, 11 February 2023 23:17

Latest News

There are 35832 listings and 1274 categories in our website