Cabinet gives final nod to 2017 Budget tax revisions

The Government this week approved the new tax regulations to be incorporated in the Inland Revenue (IR) Act.

The proposal made by Finance Minister Ravi Karunanayake to instruct the Legal Draftsman to incorporate the new regulations into the proposed Income Tax Act was also approved by the Cabinet.

The revisions in schedule ii ‘Investment Incentive Scheme’ and schedule iv ‘Incentive Scheme For Small And Medium Investors’ who invest for the period from 2017-2019, outlined the new tax regime taking the Government’s tax policy into account.

In the proposal made to Cabinet, Karunanayake highlighted that the new tax schedule follows Government policy to broaden the income tax base by “removing excessive tax incentives and/expenditures” to increase Government revenue, leading to the removal of the tax concessions offered by various agencies and under various regimes which are termed “ad-hoc” and “unproductive”.

Under the new scheme all income tax incentives “will solely be based on the investment made on the capital assets, employment generation and the area in which the investor invests.” 

These incentives will be dealt with under the IR law, the Minister informed Cabinet.