Minister of Finance Basil Rajapaksa has assured the Cabinet of Ministers that the Employees’ Provident Fund, the Employees’ Trust Fund, and nine other funds will be exempted from the one-time tax surcharge of 25 percent proposed in the 2022 Budget.
The government proposed through the 2022 Budget to impose a 25 percent Surcharge tax on individuals or companies whose annual taxable income exceeds Rs. 2 Billion.
According to government sources, Minister Rajapaksa has assured the Cabinet during last evening’s meeting that despite various assertions, the 25 percent Surcharge tax will not be imposed on 11 funds including the EPF and ETF.
The Ministry of Finance gazetted the Surcharge Tax Bill on the 7th of February.
According to the Bill, a 25 percent surcharge will be imposed on any individual, partnership, or company, whose taxable income calculated in accordance with the provisions of the Inland Revenue Act, exceeds Rs. 2 Billion, for the year of assessment that commenced in April, 2020.
Several experts, as well as opposition Parliamentarians, raised concerns about the move that will see for the first time the imposition of a 25 percent tax on EPF and ETF profits.
However, the Finance Minister has now assured that the EPF and ETF will be exempted from the new surcharge tax.
Parliament is also expected to debate the bill extensively in the coming weeks.