Through the new amendments brought to the Inland Revenue Act, the income taxes imposed on small and medium scale, manufacturing and export business entities have been increased.
A 40% tax is to be imposed on the profits earned by alcohol, tobacco, betting and gambling businesses.
According to the Local Revenue Amendment Bill published in a gazette notice issued on Tuesday (11), the taxes applicable to business establishments have also undergone a number of amendments.
Accordingly, it is stated that the tax imposed on the profit of a small and medium business organization has been increased from 14% to 30%.
The tax rate for the profit earned by manufacturing companies has been raised to 30% from 18%.
The tax imposed on the profits of export business establishments will increase from 14% to 30%.
A 40% tax is levied on profits earned by alcohol, tobacco, betting and gambling businesses.
In relation to capital gains tax, steps have been taken to increase the tax payable on “sub-cultivation” of investment assets from 10% to 30%.
The tax exemption given to IT service providers is also scheduled to be removed from April 1, 2023.
Also, if a person who is not a permanent employee of an institution earns more than 100,000 per month by providing services to that institution such as teaching, lectures, conducting examinations, examination supervision, etc., a withholding tax of 5% will be collected from that amount.
A doctor, an engineer, a chartered accountant, a lawyer, a software developer, a researcher etc. while providing services to an organization, if the income earned exceeds one lakh per month, they will have to be subject to 5% withholding tax.
