ECONOMYNEXT – Sri Lanka has tabled an amendment to the Inland Revenue Act to raise taxes on pension funds to 30 percent from the current 14 percent in parliament.
The amendment was published on the government gazette on July 17, and was apparently unchallenged in court.
According to the amendment:
” (3) Such part of the gains and profits received or derived by the Employees Trust Fund, an approved provident or pension fund or an approved termination fund from treasury bonds, for the second six months period of the year of assessment commencing on April 1, 2023 and for each year of assessment commencing on or after April 1, 2024, shall be taxed at the rate of 30%
And
“(4) Notwithstanding anything to the contrary in the provisions of subparagraph (3), if the Employee Trust Fund, an approved provident or pension fund or an approved termination fund has invested in eligible bonds, and the Registrar of the Public Debt Department of the Central Bank of Sri Lanka confirms that any such fund has effectively participated in the process of domestic debt optimization approved by the Parliament by Resolution dated July 1, 2023, such part of the gains and profits received or derived by such funds from the treasury bonds, for the second six months period of the year of assessment commencing on April 1, 2023 and for each year of assessment commencing on or after April 1, 2024 shall be taxed at the rate of 14%.
On August 09, the parliament would also debate an amendment to the Appropriation Act to raise the borrowing limit in 2023 to permit the restructuring of debt. (Colombo/Aug09/2023)