The government remains committed to increasing the monthly personal income tax-free threshold to Rs. 200,000, but did not promise to implement the measure within its first year in office, Deputy Minister Nishantha Jayaweera told Parliament.
The issue was raised by SJB MP Hesha Withanage, who questioned the government over its election pledge to increase the tax-free threshold from Rs. 100,000 to Rs. 200,000.
Withanage said the pledge was included in the government’s policy manifesto and questioned why it had not yet been fully implemented. He asked whether the government still intended to increase the threshold to Rs. 200,000 or whether the promise had been made merely to attract votes.
Responding, Jayaweera said the pledge remained in place and would be implemented.
“Our policy statement does not contain false promises. We will implement the policies we promised. But we did not say that the Rs. 200,000 threshold would be introduced within the first year after coming to power,” he said.
Jayaweera said the government had already increased the monthly tax-free threshold from Rs. 100,000 to Rs. 150,000, equivalent to an annual threshold of Rs. 1.8 million.
He also said changes had been made to provide further relief to taxpayers, including adjustments to the tax bands applicable above the tax-free threshold.
The Deputy Minister said the government intends to move towards the Rs. 200,000 tax-free threshold as state revenue strengthens.
“We will definitely fulfil that promise. Discussions are currently taking place with various parties under the President, and decisions are being considered on how this should be implemented,” he said.
According to Jayaweera, the government’s medium-term policy is to reduce tax rates while expanding the tax base and improving tax compliance.
He said the government believes some existing tax rates remain high and place a burden on the public, adding that reductions would have to be implemented alongside measures to strengthen revenue collection.
During the exchange, Withanage also questioned the government over another election pledge concerning tax relief on educational materials for schoolchildren.
Jayaweera said the government had instead provided a Rs. 6,000 allowance to schoolchildren as a form of relief and maintained that further benefits would be introduced as government revenue improves.
He said stronger tax collection had enabled the government to finance several programmes and argued that improved revenue collection would create room to provide additional relief to taxpayers.
The Deputy Minister reiterated that the government intends to fulfil all tax-related commitments contained in its policy manifesto, including increasing the monthly tax-free threshold to Rs. 200,000, although he did not provide a specific timeline for its implementation. (Newswire)
