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PAYE tax calculation to be modified

The Government has decided to grant additional relief and cash benefits to the people and modify the Pay As You Earn (PAYE) tax calculation, National Policies and Economic Affairs State Minister Dr. Harsha de Silva said yesterday.

The revisions will be made by way of an amendment to the newly introduced Inland Revenue Act.

The State Minister posting in his official Tweeter account said some tweaking to the PAYE tax calculation would be made shortly to benefit mid and upper mid level executives as well as bulk of private sector. He also hinted that additional relief of cash benefits could also be expected.

 He said an adjustment on vehicle benefits has already been done by the Commissioner General of Inland Revenue Department.

Finance and Mass Media Minister Mangala Samaraweera speaking in Parliament recently said a series of amendments to rectify the identified loopholes of the IR Act will be presented in Parliament early this month.

Among the revisions he mentioned were the removal of 15 percent VAT on channeling at private hospitals, exemption of all savings accounts of children less than 18 years from income tax and

exemption of royalty payments upto Rs 50,000 per month from income tax.

The new Inland Revenue Act came into operation from April 1. It introduced a new income tax structure to raise the state revenue by closing existing loopholes in revenue collection.