Saturday, February 27, 2016

Ravi K dismisses PAYE tax rumours

Finance Minister Ravi Karunanayake dismissed speculation yesterday that the Pay as you Earn (PAYE) tax on salaries would be revised to Rs. 750,000 from the threshold of Rs.2.4 million slated in the Budget proposals.

The Minister dismissed the rumours saying it was mere speculation. “There is no such thing, we are not going to revise this,” he told the Sunday Observer.

The government in the 2016 Budget raised the tax-free threshold for PAYE tax on annual salary from Rs. 750,000 to 2.4 million, while maintaining corporate income tax at 15 and 30 percent.

In his remarks proposing the Budget last year, the Minister said the move to increase the figure was to provide concessions to employees.

PAYE tax above this limit is to be charged at a uniform rate of 15 percent and the taxable income will be inclusive of all the earnings of the employee with no exemptions. He estimated a decline in revenue from individual tax by Rs. 4 billion as given in the Appendix to the Budget Speech.

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