Tax
From The Report: Sri Lanka 2016
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This chapter explores the Sri Lankan tax framework, giving a breakdown of the various regulatory authorities, revenue collection systems, taxpayer services and other elements. It also contains a viewpoint from Sujeewa Rajapakse, Managing Partner, BDO Partners.

Articles from this Chapter

Overview

Key points: An overview of the country’s taxation framework
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In Sri Lanka taxes are levied by various regulatory authorities by virtue of the powers vested in them. Here, we have set out an outline of the key taxes of the country. The list is not exhaustive and aims to be of general guidance only. Income Tax Income tax is charged on every person (residents and non-residents) on profits and income. Residents are charged on their global income while non-residents are charged on income arising in or derived from Sri Lanka. Income tax is charged for a year…

Analysis

Full automation: A new online system is set to improve efficiency, transparency and financial flexibility
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In addition to serving as a source of government revenue, taxation helps bridge the wealth gap. Taxation is also used as a disincentive on the consumption of demerit goods. Inflation rates and the balance of payments can be controlled and maintained with taxation, which can pave way for further economic growth and development. Simplifying The Tax System The tax system in Sri Lanka contains import taxes and local taxes. Import tax includes Customs duty, excise duty, cess levy, special commodity…

Viewpoint

Finding the balance: Sujeewa Rajapakse, Managing Partner, BDO Partners, on the tax system in Sri Lanka
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Taxation is an important economic tool for any government, but in Sri Lanka we have seen that the tax system is not earning the necessary revenue for the country. Ideally, as income increases, the corresponding tax revenues should also increase (though the rate of increase will decline over time). This, however, is not happening in Sri Lanka: for example, per capita income increased from $720 in 1995 to $2136 in 2014, while tax revenue decreased from 20.4% of GDP to 12.2% of GDP during the same period. Successive…