As enacted

Contents

Act of Parliament · As enacted

Inland Revenue (Amendment) Act 2025

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

Official translationFrom Department of Government Printing, unchanged

s 1Short title and the date of operation

(1)

This Act may be cited as the Inland Revenue

(Amendment) Act, No. 2 of 2025.

(2)

The provisions of this Act shall come into operation on April 1, 2025.

s 2Amendment of section 150 of Act, No. 24 of 2017

Section 150 of the Inland Revenue Act, No. 24 of 2017

(hereinafter referred to as the “principal enactment”) is hereby amended as follows: -

(1)

in paragraph (a) of subsection (2A) of that section –

(a)

by the substitution for the words “not exceeding one hundred thousand rupees,”, of the words and figures “not exceeding sixty thousand rupees for a year of assessment prior to April 1, 2025

or not exceeding one hundred and eighty thousand rupees for a year of assessment commencing on or after April 1, 2025,”;

and

(b)

in the proviso to that paragraph, by the substitution for the words “not exceeding twenty five thousand rupees for any quarter”, of the words and figures “not exceeding sixty thousand rupees for a year of assessment or fifteen thousand rupees for a quarter prior to April 1, 2025, or with effect from April 1, 2025 not exceeding one hundred and eighty thousand rupees for a year of assessment or forty five thousand rupees for any quarter”;

(2)

in subsection (3) of that section, by the substitution for the words “A refund”, of the words and figures

“Prior to April 1, 2024, a refund”; and

(3)

by the addition immediately after subsection (3) of that section, of the following new subsection: -

“(4) With regard to any year of assessment commencing on or after April 1, 2024, a refund or credit may be made under this section only if the taxpayer applies for such refund or credit –

(a)

within thirty months of the last date of the relevant year of assessment, where the taxpayer is required to file a tax return under this Act; or

(b)

within the time period specified by the

Commissioner-General, where such refund or credit is made on the

Commissioner-General’s initiative.”.

s 3Amendment of the First Schedule to the principal enactment

The First Schedule to the principal enactment is hereby amended as follows: -

(1)

in paragraph 1 of that Schedule –

(a)

in subparagraph (1C) of that paragraph, by the substitution for the words and figures

“from April 1, 2023”, of the words and figures “from April 1, 2023, but prior to

April 1, 2025”;

(b)

by the insertion immediately after subparagraph (1C) of that paragraph, of the following new subparagraph: -

‘‘(1D) Subject to the provisions of subparagraph (2), the taxable income of a resident or non-resident individual for a year of assessment commencing from April 1, 2025 shall be taxed at the following rates: -

Taxable income

Tax Payable

Not exceeding 6% of the

Rs. 1,000,000

amount in excess of Rs.0

Exceeding

Rs. 60,000 plus

Rs. 1,000,000 18% of the but not amount in exceeding excess of

Rs. 1,500,000

Rs. 1,000,000

Exceeding

Rs. 150,000 plus

Rs. 1,500,000 24% of the but not amount in exceeding excess of

Rs. 2,000,000

Rs. 1,500,000

Exceeding

Rs. 270,000 plus

Rs. 2,000,000 30% of the but not amount in exceeding excess of

Rs. 2,500,000

Rs. 2,000,000

Exceeding

Rs. 420,000 plus

Rs. 2,500,000 36% of the amount in excess of

Rs. 2,500,000

(c)

by the repeal of item (c) of subparagraph (2) of that paragraph and the substitution therefor, of the following item: -

“(c) the type of business income referred to in subparagraph (4)

shall be taxed at the rate of –

(i)

40%, prior to April 1, 2025;

and

(ii)

45%, with effect from April 1, 2025; and”; and

(d)

by the addition immediately after subparagraph (5) of that paragraph, of the following new subparagraph: -

“(6) Notwithstanding anything to the contrary in the provisions of subparagraph (1D), an individual’s following gains and profits shall be taxed at the maximum rate of 15% with effect from April 1, 2025: –

(a)

the gains and profits earned or derived from any service rendered in or outside Sri Lanka to any person to be utilized outside Sri Lanka, where the payment for such services is received in foreign currency

”.

and remitted through a bank to Sri

Lanka;

(b)

the gains and profits earned or derived from any foreign source where such gains and profits are earned or derived in foreign currency and remitted through a bank to Sri Lanka.”;

(2)

in paragraph 4 of that Schedule –

(a)

in subparagraph (1) of that paragraph, by the substitution for the words and figures

“subparagraphs (2), (2A), (2B) and (3)”, of the words and figures “subparagraphs (2), (2A), (2B), (2C) and (3)”;

(b)

in subparagraph (2B) of that paragraph, by the substitution for the words and figures

“commencing on or after April 1, 2023,”, of the words and figures “commencing on or after April 1, 2023, but prior to April 1,

2025,”; and

(c)

by the addition immediately after subparagraph (2B) of that paragraph, of the following new subparagraph: -

“(2C) Such part of the following gains and profits of a company which includes in its taxable income for any year of assessment commencing on or after April 1, 2025, the gains and profits of a company shall be taxed at the following rates: -

(a)

gains and profits earned or derived from any service rendered in or outside Sri Lanka to any person to be utilized outside Sri Lanka, where the payment for such services is received in foreign currency and remitted through a bank to Sri

Lanka -15%;

(b)

gains and profits earned or derived from any foreign source where such gains and profits are earned or derived in foreign currency and remitted through a bank to Sri Lanka – 15%;

(c)

gains and profits from conducting betting and gaming

45%; and

(d)

gains and profits from the manufacture and sale or import and sale of any liquor or tobacco product other than the export of such product – 45%.”; and

(3)

by the repeal of item (d)(ii) of subparagraph (1) of paragraph 10 of that Schedule, and the substitution therefor, of the following item: -

“(ii) interest or discount paid –

(a)

with effect from January 1, 2023, but prior to April 1, 2025 - 5%;

(b)

with effect from April 1, 2025 –

10%;”.

s 4Amendment of the Third Schedule to the principal enactment

The Third Schedule to the principal enactment is hereby amended in paragraph (u) of that Schedule as follows: -

(1)

in subparagraph (iii) of that paragraph, by the substitution for the words and figures “on or after

January 1, 2020;”, of the words and figures “on or after January 1, 2020, but prior to April 1, 2025;”;

and

(2)

in subparagraph (iv) of that paragraph, by the substitution for the words and figures “on or after

January 1, 2020;”, of the words and figures “on or after January 1, 2020, but prior to April 1, 2025;”.

s 5Amendment of the Fifth Schedule to the principal enactment

The Fifth Schedule to the principal enactment is hereby amended in subparagraph (a) of paragraph 2 as follows: -

(1)

in item (iii) of that subparagraph, by the substitution for the words and figures “April 1, 2022; and”, of the words and figures “April 1, 2022;”;

(2)

in item (iv) of that subparagraph, by the substitution for the words and figures “April 1, 2023,”, of the words and figures “April 1, 2023, but prior to April 1, 2025; and”; and

(3)

by the addition immediately after item (iv) of that subparagraph, of the following new item: -

“(v) Rs. 1,800,000, for each year of assessment commencing on or after April 1, 2025,”.

s 6Sinhala text to prevail in case of inconsistency

In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.

PRINTED AT THE DEPARTMENT OF GOVERNMENT PRINTING, SRI LANKA.