- Interim Budget Revenue Proposals
1.1 A number of tax reforms pertaining to Income Tax, Value Added Tax (VAT), Telecommunication Levy and Betting and Gaming Levy have been already approved to be implemented. Some of these tax proposals have already been implemented.
1.2 In addition, the VAT rate will be increased to 15 percent from the current rate of 12 percent with effect from 1st September 2022.
1.3 Most revenue proposals introduced in May 2022 will be effective from 1st October 2022.
1.4 The implementation of these proposals will help increase the revenue. It will enable to gradually reduce the quantum of monetary financing for government expenditure.
1.5 The revenue from the above proposals is also included under the revenue estimates presented in the amendments to the 2021 Appropriation Act.
1.6 In addition, it is expected to present new revenue enhancing proposals aiming at Budget 2023.
- Tax Administration
1.1 In our efforts to increase the revenue, tax administration must play a pivotal role in enhancing the tax collection efficiency, strengthening tax compliance and preventing tax avoidance.
1.2 In addition to the already existing requirements, I propose to introduce compulsory tax registration for all residents who are above 18 years of age without considering their annual income and tax-free thresholds.
1.3 The government is committed to implement the recommendations in the Final Report of the “Presidential Commission of Inquiry into Sri Lanka Customs”. This will strengthen corporate, administrative, and operational processes of Sri Lanka Customs to discharge its responsibilities effectively and efficiently.
- Non-Tax Revenue
1.1 Measures will be taken to enhance non-tax revenue, including royalties received for government assets. I also propose to take actions to attract foreign investors and/or technology holders to establish joint ventures with Sri Lankan partners for industrial investments with advanced technologies to ensure better utilization of our mineral resources and increase value addition without jeopardizing the interests of the national economy and the sustainable use of resources.