Introduction of changes to tax system:

Improves tax administration

Gayan Kanchana

With the introduction of changes to the tax scheme in the country, the number of taxes payable by a person would be reduced, thereby resulting in simplification of a tax system which improves the effectiveness of the tax administration.

Commencing on or after April 1, 2011 the government has introduced several changes with regard to the financial tax and investment related legislation in the form of amendments to the existing 14 Acts and along with one new legislation in keeping with the budget proposals of 2011.

The reduction of VAT rate on financial services and some of the goods and services from 20 percent to 12 percent and the introduction of a new VAT suspension scheme (SVAT) for exporters and deemed exporters, the removal of the social responsibility levy, the removal of the debit tax and the cellular mobile subscriber's levy are some of the proposed amendments to the existing Acts.