The efficiency of tax collection will be improved through the introduction of an online – managed single Special Goods and Service Tax (GST) in place of the various goods and service taxes and levies, imposed under multiple laws and institutions on alcohol, cigarettes, Telecommunication, betting and gaming and vehicles, which accounts for 50% of the income from taxes and levies, Prime Minister Mahinda Rajapaksa said in parliament today.

It is expected through this reform to direct Institutions under special legislation such as the Excise Ordinance to have a more focused regulatory engagement in facilitating the government to secure its revenues otherwise lost through sale of illicit alcohol and cigarettes.

The presentation of the budget proposal for the year 2021 is currently underway at the parliamentary session by the Minister of Finance, Prime Minister Mahinda Rajapaksa.

Further, the premier stated that, individuals and companies engaged in farming, including agriculture, fisheries and livestock farming will be exempted from taxes in the next 5 years.

Moreover, as to promote the listing of local companies with the Colombo Stock Exchange, it was proposed to provide a 50% tax concession for the years 2021/2022 for such companies that are listed before 31 December 2021 and to maintain a corporate tax rate of 14% for the subsequent three years.

Further, it was proposed to simplify the Taxes on Capital Gains, where such taxes will be calculated based on the sale price of a property or the assessed value of a property whichever is higher and to exempt the tax on dividends of foreign companies for three years if such dividends are reinvested on expansion of their businesses or in the money or stock market or in Sri Lanka International sovereign bonds.