| Year |
Policy Changes |
| 1941 |
Excess Profits Duty came into operation |
|
1948 |
Profits Tax was introduced replacing Excess Profits Duty |
|
1950 |
Signed the first Double Tax Relief Treaty by Ceylon with UK |
|
1958 |
Kaldor Commission Proposals
- Taxation of Capital gains
- Imposing Wealth Tax
- Expenditure Tax
- Gifts Tax
Named the Department as Department of Inland Revenue |
|
1961 |
Introduction of surcharge on income tax,
National Development Tax, Rice Subsidy Tax,
Surtax, a Tax on Registration of Business and Professions and a Sales Tax (Last for 2 days only) |
|
1963 |
Establishment of first Regional Office in Jaffna.
Introduction of Business Turnover Tax under Finance Act 11 of 1963. |
|
1964 |
The first tax amnesty |
|
1971 |
Compulsory Savings Levy came into operation
PAYE scheme was introduced.
Capital Levy was introduced |
|
1972 |
Introduction of the Self Assessment Scheme. |
|
1974 |
The Department of Inland Revenue was re-structured.
Inland Revenue Service was established |
|
1979 |
Enactment of fist Inland Revenue Ac t,No 28 of 1979
Introduced current year basis taxation (79/80) |
|
1983 |
Introduction of Rehabilitation Levy |
|
1985 |
Abolished Estate Duty and Gifts Tax |
|
1986 |
Introduction of Withholding Tax on interest |
|
1988 |
Implementation of the "Imputation System" of Company Taxation.
Imposition of Betting and Gaming Levy. |
|
1991 |
Devolution of Turnover Tax on whole sale and retail to Provincial Councils. |
|
1992 |
Introduction of Withholding Tax on Specified Fees.
Commenced Automation at the Department of Inland Revenue
Introduce National Security Levy (NSL) |
|
1998 |
Introduction of Goods and Services Tax (in place of Turnover Tax) from 01.01.1998 - threshold for registration Rs. 500,000 per Quarter or 1,800,000 per annum at 12.5% |
|
2000 |
Inland Revenue Act No.38 of 2000 |
|
2002 |
- Introduction of Value Added Tax –(by abolishing Goods and Services Tax and National Securities Levy) – threshold for registration Rs. 500,000 per Quarter or 1,800,000 per annum and charged under 3 types of ratio – Zero, 10% and 20% goods specified in the schedules
- Abolished Stamp Duty and introduced Debits Tax
|
|
2003 |
VAT on financial Services was introduced on the book profit of banks and financial institutions. |
|
2004 |
- Economic Service Charge was introduced by finance Act No 11 of 2004
- Standard VAT ratio changed to 15% from 01.01.2004 and basic rate was Imposed on several essential goods at 5% with effect from 19.11.2004
|
|
2005 |
- Introduced Share Transaction Levy at the rate of 0.2% of tax payable by every buyer and seller.
- Introduced Social Responsibility Levy at 0.25% of Tax payable
- NGO Tax – 3% of amount received at 30%
- Luxury VAT ratio changed twice. From 01.01.2005 to 01.08.2005 18% and From 02.08.2005 – 20%
- Issuance of privilege cards to good tax payers was commenced from 02.11.2005
|
|
2006 |
- Inland Revenue Act No.10 of 2006
- Economic Service Charge Act No.13 of 2006 – with effect from the quarter commencing on April 1, 2006 ESC imposed under this Act
- SRL was increased to 1% w .e .f. 2006/07
- Two new principles incorporated into income tax Act for transfer pricing and thin capitalization
- Stamp Duty was reintroduced
|
|
2007 |
- 15% of deemed dividend tax was imposed on Companies which had distributed the dividend less than 25% of its distributable profit
- 10% of partnership tax imposed on partnerships which have divisible Profit more than Rs.600,000
- Allowable input tax credit for VAT for any taxable period was restricted to 85%of output declared from 01.01.2007
- VAT withholding Tax introduced - 1/3rd of VAT payable to any contractor or supplier by any Government agencies
- Introduction of Optional VAT whose value of supply was between 1.8Million and 2.5Million per annun.
|
|
2008 |
SRL ratio was increased to 1.5% from 01.04.2008 and withdrawn it on Personal income tax |
|
2009 |
- Introduction of Nation Building Tax (NBT) – Rate 1% from 01.02.2009 and from 01.05.2009 increased to 3%
- Standard VAT ratio reduced to 12% and basic rate was removed
- Registration limit for VAT was increased to Rs.650,000 per quarter or Rs.2.5 million per year
- Optional VAT limit for registration was increased to Rs.3 Million
|
|
2011 |
- Tax appeal Commission was formed commencing from 01.04.2011
- Individual tax free allowance increased to Rs. 500,000
- Introduction of SVAT scheme w.e.f 01.04.2011
- Rate of share Transaction Levy was increased to 0.3% w.e.f.01.01.2011
- 20% of VAT Rate was reduced to 12%
w.e.f 23.11.2011 and VAT
- On financial rate also reduced to 12% from 01.01.2011
- Restriction of 85% of output for claiming input VAT has been removed
- NBT rate was reduced to 2% and extended to charge on wholesale and Retail businesses
- Threshold for ESC registration was increased to Rs.25 Million per quarter
- Abolition of Debits Tax from 01.04.2011
- Abolition of Withholding Tax on Specified Fees, and Commercial Rents (01.04.2011)
- Abolition of VAT Advance Payments (January 1,2011)
- Abolition of Social Responsibility Levy (SRL) (01.04.2011 in relation to income tax)
- Abolition of Regional Infrastructures Development Levy (RIDL)(January 1, 2011)
- Abolition of Turnover Tax (TT) collected by the Provincial Councils (01.01.2011)
|
| 2012 |
- Threshold on ESC was increased to Rs. 50M per quarter and made liable to who have no taxable income
- Betting and gaming levy rate was increased and 5% levy on gross collection was introduced with a requirement of registration
|
| 2013 |
- Registration Threshold on Value added Tax and Nation Building Tax was increased to Rs. 12 million per annum
- Introduction of VAT on wholesale and retail trade, and liable threshold for registration was not less than Rs.500Mn (including exempt supplies) for any consecutive 3 months in an year
- The threshold in relation to partnership tax was increased to Rs.1000,000
|
|
2014 |
- Maximum rate of income tax applicable on employment income of Qualified professionals 16%
- Liable threshold for registration of wholesale and retail trade reduced to Rs.250 Million
|
| 2015 |
- Threshold on Value added Tax and Nation Building Tax was increased to Rs. 15 million per annum and Rate of VAT reduced to 11%
- Liable threshold for registration of wholesale and retail business reduced to Rs.100 Million
- Fixed qualifying payment for employees was increased up to Rs. 250,000
- Maximum income tax rate applicable to employment income for every employee was limited to 16%
- Annual levy payable under the Betting and Gaming Levy Act increased to 10%
- Introduction of Casino entry fee of US$100 per person
- Imposition of Excise (Special Provision) Import or Manufacture of Liquor, Cigarettes and Custom Duty on Motor Vehicles in lieu of VAT and NBT
- Super Gain Tax was introduced as one off payment, for any individual, company or group of company who has earned profits over Rs. 2,000 million in the tax year 2013/2014 will be liable to pay 25% of their profit.
|
