PAYE tax slashed for Govt, private sector employees | Page 2 | Sunday Observer

PAYE tax slashed for Govt, private sector employees

9 February, 2023

Finance State Minister Ranjith Siyambalapitiya yesterday said the government had decided to introduce exemptions to the PAYE (Pay As You Earn) tax imposed on individuals whose monthly income is above Rs.100,000 on the directive of President and Finance Minister Ranil Wickremesinghe. He said that the relevant circular granting these exemptions has already been issued.

Accordingly, the tax imposed on non-cash benefits such as residences, transport facilities and communication facilities provided by the employer has been amended.

By this circular, the value of non-cash benefit from any residence provided by the employer has been revised to 12.5% of the salary.

The value of benefit from the private use (partly) of any motor vehicle provided by the employer has been revised to Rs.20,000 from Rs.50,000 and Rs.75,000 for vehicles with engine capacity over 1800cc and below 1800cc, respectively. For drivers and fuel allowances, the value has been revised to Rs.10,000 and Rs.20,000, respectively.

The value of the benefit from private use of any motor vehicle used for field work, provided by the employer where an accurate record of such usage is maintained by such employer, amount of such non cash benefit will be Rs.25 per km (irrespective of the engine capacity of the vehicle) but shall not exceed Rs.20,000 per month.

Meanwhile, when any employee is entitled to receive a payment for communication facilities under any circular, directive or regulation issued on that behalf by the Government, 25% of the cost incurred by the employer for such payment should be the value of the benefit to the employee of such payment.

Circular on exemptions to PAYE tax issued

Public Administration and Home Affairs Ministry has taken steps to make the District and Divisional Secretaries aware of the several exemptions introduced by the government to the Pay As You Earn (PAYE) tax. Ministry Secretary Neil Hapuhinna has written to the authorities concerned to comply with the new circular which consists of several exemptions introduced to the PAYE tax.

 

 

 

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