More revenue from income tax

Irangika Range

The revenue generated from income tax during the first eight months of 2012 increased by 20.8 percent to Rs. 117,149 million compared to the same period of 2011. Corporate and non-corporate income tax and Withholding Tax (WHT) showed an improvement during this period while revenue from Pay As You Earn (PAYE) tax and Economic Service Charge (ESC) declined.

Due to the increased business turnover during the January - August period of 2012, revenue from corporate and non-corporate income tax increased by 14.8 percent to Rs. 48,322 million.

The period under review is a transitional period after the introduction of a series of tax reforms in 2011 with a view to simplifying the country's tax system, broadening the tax base and improving compliance to generate a positive impact on the government revenue in the medium term. "These performances in income taxes should be analyzed in this context," an Finance and Planing Ministry official said.

Income tax revenue from tobacco and alcoholic businesses increased significantly due to the higher 40 percent rate, while WHT on interest recorded a sharp increase during this period, due to the high interest rate structure that prevailed in this period when compared to the previous year.