Cabinet Spokesman, Minister of Transport, Highways and Mass Media Dr. Bandula Gunawardhana said that the Government employees’ salary increase will be included in the Budget from January 2025. In addition, the Cabinet which met on Friday (September 13) has decided to reduce the PAYE tax.
The Government held discussions with the International Monetary Fund (IMF) to reduce the tax burden of the employees in the public and private sectors, where the Ministry of Finance had submitted one proposal to the IMF and another proposal from the IMF to the Government.
The President had told the Cabinet that the proposal of the IMF to reduce the PAYE tax should be accepted. Accordingly, the tax payable by an employee with the salary and allowances of Rs. 150,000 per month was Rs. 3,000 and Rs. 500 will be deducted from that. A person earning Rs 300,000 per month would have to pay a tax of Rs 7,000 which will be reduced by Rs 3,500. A person earning Rs. 450,000 per month will pay Rs. 76,000 in tax, which will be reduced by Rs. 12,500.
The PAYE tax by all Government employees, corporate bodies and private sector employees will be reduced. The Minister also said that the Budget will be prepared in accordance with the provisions of five main acts in preparing the Budget this year.
All these will be done according to the Central Bank of Sri Lanka Act No. 16 of 2023, Public Debt Management Act No. 33 of 2024, Financial Management Act No. 44 of 2024, Economic Transformation Act No. 45 of 2024 and the Anti-Corruption Act No. 28 of 2023, the Minister said.
