Sri Lanka to revise personal income tax

Sri Lanka’s Cabinet of Ministers has approved adjustments to the Personal Income Tax (PIT) structure, aiming to provide tax relief while maintaining fiscal stability. The revisions include an increase in tax bands from Rs. 500,000 to Rs. 720,000, allowing taxpayers to enjoy a broader income range within lower tax brackets. However, the tax-free threshold remains unchanged at Rs. 1.2 million per annum.

Additionally, the marginal tax rate at each band will stay at 6%, with the highest tax rate remaining at 36%. These changes are expected to ease the tax burden on individuals while ensuring steady revenue collection for the government. The modifications align with Sri Lanka’s broader economic policy to balance tax efficiency with sustainable fiscal management.

Minister of Foreign Affairs Ali Sabry confirmed in a post on X that the new tax adjustments will take effect from April 2025. This move marks a significant shift in Sri Lanka’s tax policy, potentially benefiting a large portion of the workforce while maintaining the country’s economic resilience.

Source: News 1st