Minister of Labour and Deputy Minister of Economic Development Prof.
Anil Jayantha Fernando dealt with concerns regarding the taxation of people earning foreign profits through digital services.The Minister emphasized that recent modifications to the Inland Revenue Act have actually been misinterpreted, resulting in mistaken beliefs in society.Prof.
Fernando clarified that the taxation system applies to all earnings made within Sri Lanka, whether the source is domestic or global.
He highlighted that relief steps have actually been introduced for those earning from digital services compared to other sectors.There has actually been debate about a 15% tax on service exports, with some believing it is an entirely brand-new tax.
In reality, under the Income Tax Act, everyone undergoes earnings tax.
People making less than Rs.
150,000 per month will be fully exempt from income tax beginning in April, despite their industry, he explained.For those earning above this limit, a progressive tax system applies.
Prof.
Fernando supplied an example:- If a specific earns Rs.
200,000 each month from supplying digital services for abroad, the first Rs.
150,000 is tax-free.- The remaining Rs.
50,000 falls within the Rs.
85,000 tax bracket, taxed at 6%, amounting to just Rs.
3,000.
He even more explained that while common taxpayers face income tax rates of approximately 36%, those in the digital services sector are topped at an optimum of 15%.
This, he argued, offers a relative advantage instead of imposing an additional burden.Prof.
Fernando advised the public to avoid misinformation, mentioning that the new tax structure is not an unfair imposition however rather an action towards a more well balanced taxation system.