The Tweep Formally Known as Quagmire

⭕ Since September 2024, the only effective tax reduction has been the increase in the annual income tax-free threshold from Rs. 1.2 million to Rs. 1.8 million, providing a maximum monthly tax saving of Rs. 20,500 per taxpayer. Almost all other taxes remained unchanged or increased. Here is the list in chronological order: ⭕ Excise Duty (January 2025): Increased by ~6% on liquor, cigarettes, tobacco, sweetened beverages and motor vehicles. ⭕ Electric Vehicle Tax (February 2025): Excise duty rates on electric vehicles were doubled, representing a 100% increase. ⭕ Vehicle Import Duty (February 2025): The previous Customs duty exemption was removed, introducing a 20% import duty. A further 50% surcharge increased the effective duty to 30%. ⭕ Withholding Tax (April 2025): Tax deducted from bank deposit interest doubled from 5% to 10%. Eligible low-income depositors can obtain relief through self-declarations. ⭕ Corporate Income Tax (April 2025): Increased from 40% to 45% for businesses involved in liquor, tobacco, betting and gaming. ⭕ Export Services Tax (April 2025): Previously exempt income from qualifying service exports and foreign sources became subject to income tax at a maximum rate of 15%. ⭕ Vehicle SSCL (May 2026): The 2.5% Social Security Contribution Levy was extended to vehicle imports, changing the stage and taxable base of the levy. ⭕ Capital Gains Tax (June 2026): Increased from 10% to 15% for individuals and partnerships, and from 10% to 30% for trusts, unit trusts, mutual funds and NGOs. ⭕ Professional Withholding Tax (June 2026): The 5% withholding tax was extended to additional categories of professionals, including photographers, artists, IT specialists and social media specialists, on qualifying payments exceeding Rs. 100,000 per month. ⭕ Customs Import Duties (April 2026): The tariff structure was revised from 0%, 15% and 20% to 0%, 10%, 20% and 30%, introducing a higher 30% band for selected imports while reducing certain other duties. ⭕ Vehicle Import Surcharge (May 2026): A 50% surcharge on the existing 30% Customs import duty increased the effective rate to 45% for applicable vehicles. The measure was subsequently extended until 31 December 2026. ⭕ Digital Services VAT (July 2026): Qualifying digital services supplied by non-resident providers were brought within the 18% VAT framework. However, practical implementation remains incomplete. #srilanka