President Anura Kumara Dissanayake revealed in Parliament today (18) that an agreement has been reached with the Inte ational Monetary Fund (IMF) to increase the withholding tax from 5% to 10%.

Explaining the changes, the President noted that the tax could apply even to individuals ea ing below Rs. 150,000 in monthly interest, such as pensioners.

To address this, a new section will be established in the Inland Revenue Department to allow citizens to present their tax status and ensure they are not unfairly taxed if their income is below the threshold.

The President also announced other tax adjustments agreed upon during discussions with the IMF:

• The value-added tax (VAT) on local fresh milk and yogurt will be removed to promote better child nutrition.
• The tax on service exports will be reduced from 30% to 15% to encourage growth in the sector.