Salaries of workers paying Employees Provident Fund will continue to be taxed as at present with no change, Deputy State Minister Eran Wickramaratne said.
“The status quo will remain,” he told reporters.
Former President Mahinda Rajapaksa had warned that under a new Inland Revenue Act, the taxable gross salary of a person will be raised by 12 percent to include the employers’ contribution to the Employees Provident Fund.
If there is no change only the present eight percent deduction (from the employees salary which is remitted to the EPF) will be taxed.
The new administration is also taking away a 35,000 to 50,000 rupee a month transport or car allowance that was made tax free by Rajapaksa.
The current administration is consolidating a 60,000 tax free allowance with 50,000 car allowance and will charge Pay As You Earn (PAYE) tax from 100,000 rupees a month upwards.
When Rajapaksa was finance minister the maximum personal tax rate was made 16 percent in a bid to improve compliance.