SJMS Associates Budget Highlights 2013

08th November 2012
Dear Client
B U D G E T P R O P O S A L S 2013
His Excellency the President and the Minister of Finance and Planning Mahinda
Rajapakse presented the 9th consecutive Budget of the UPFA Government today. This
memorandum includes the salient features of the budget proposals for 2013.
The Budget for 2012, said to be development oriented, to develop the country after 30
years of civil conflict and had granted concessions and incentives to reactivate and uplift
the economy. Taxes were streamlined and reduced to bring down rates to acceptable
levels, or to be amongst the lowest in the region.
In this background, His Excellency the President presented the 9th Budget, maintaining
the present tax structure. Amendments have been to clear ambiguity, provide clarity
with regard to transfer pricing regulations, Tax Appeals Commission Act, etc., and grant
concessions to certain identified sectors.
It should be noted that information provided in this booklet or proposal may be subject to
changes at the time of legislation. Therefore, it is advised that any conclusion or decision
should be arrived at only after due consideration and consultation.
For further information and guidance, the Tax Advisory division of SJMS Associates will
be pleased to assist you.
This information could be viewed on our website at www.sjmsassociates.lk
Yours faithfully,
SJMS ASSOCIATES
Chartered Accountants
3
Budget Highlights 2013
Contents
1. INCOME TAX 5 - 15
2. VALUE ADDED TAX 16 - 18
3. NATION BUILDING TAX 19 - 20
4. ECONOMIC SERVICE CHARGES 21
5. MISCELLANEOUS 22 - 34
6. CUSTOMS DUTIES 35 - 36
7. OUR COMMENTS 37 - 38
Appendix
A Summary of Corporate Tax Rates 39 - 42
B Comparisons of Current Corporate Taxes,
Withholding Taxes, Indirect Taxes etc. 43 - 44
C Comparison of effective tax rates
for resident individual 45
D Retiring Benefits 45
4
5
1. Income Tax
1.1 Personal Income Tax
1.1.1 Tax Exemptions
(a) Exemptions to individuals
Proposed
The income from emoluments arising in Sri Lanka of any individual;
- who is an expert and a not a citizen of Sri Lanka,
- brought to Sri Lanka by a BOI Company,
- during the period of a tax holiday under Section 17A or Section 16D of the
Inland Revenue Act, where the total investment made is out of foreign direct
investment exceeding USD 50mn, if such services are essential to carry out
the activities of the Company, as determined by the BOI on a request made
for this purposes will be exempt from income tax.
An expert referred to here is an individual who has expertise in such field
as may be determined by the Commissioner-General, as being a field in
which sufficient expertise is not available among the citizens of Sri Lanka.
The number of experts in an undertaking to whom this provision is applicable
shall not exceed five.
Present
Exemption is available for emoluments arising in or out of Sri Lanka, of anexpert
being a non-citizen employed under a Strategic Development Project or any
undertaking which has entered into an agreement with the Government of Sri
Lanka.
(b) Source - wise exemption
Proposed
Income from investments in bonds obtained by persons outside Sri Lanka will be
exempt from income tax.
Present
Only loans are covered under the exemption.
6
2. Concessionary Rates
1. Tax concessions to Sri Lankan citizens earning outside Sri Lanka
(a) Resident of Sri Lanka
Proposed
The profits and income earned from any source outside Sri Lanka by an individual
who is a resident and citizen of Sri Lanka will be exempt from income tax, if the
income earned is remitted to Sri Lanka through a bank in Sri Lanka.
Present
The exemption is applicable only for income derived through services rendered
and royalty income received.
(b)Permanent resident outside Sri Lanka.
Proposed
The profits and income earned outside Sri Lanka by individuals who have
obtained permanent resident status in any other country or any similar status in
which such individual obtains the citizenship in Sri Lanka and any other country
will be exempt from income tax.
Present
The exemption is applicable to Dual Citizens only.
Employment Category Maximum
Proposed
Income Tax
Rate
Maximum
Present
Income Tax
Rate
Employment income of a pilot referred to under
Section 40A
16 % 20%
Employment income of a qualified employee referred
to under Section 40B ( where identified professional
services are provided to persons out of Sri Lanka for
payment in foreign currency)
16 % 20%
Employment income in the form of compensation
for loss of office or employment referred under
subsection (2) of Section 35, where such scheme is
not uniformly applicable to all the employees
16 % 20%
7
1.2 Corporate Income Tax
1.2.1 Exemptions for Institutions
Proposed
Profits and income (other than income from dividends and interest) of the
following will be exempt from income tax:
- College of General Practitioners of Sri Lanka established under Act No 26 of
1974
- Sri Lanka Social Security Board established under Sri Lanka Social Security
Board Act No 17 of 1996
- Any Public Corporation to the extent of provision of services, free of charge,
out of the funds allocated by Parliament from the Consolidated Fund or out
of any loan arranged through the Government
- Sri Lanka Savings Bank which is merged with National Development Trust
Fund (NDTF)
- Lanka Puthra Development Bank
Present
These institutions are not granted exemptions under Section 7.
1.2 Exemptions For Specific Sources
a. Profits and income earned from off-shore business
Proposed
Profits and income earned in foreign currency by a resident company or
partnership in respect of any off-shore business, where goods are procured
from one country and transported to another country other than Sri Lanka. (with
effect from 1.4.2012)
Present
Exemption is only in respect of any off-shore business which does not in any
way involve any goods manufactured or produced in Sri Lanka or any goods
imported to Sri Lanka.
b. Royalty, franchising fee or any payment for designing made for to any
foreign collaborator
Proposed
Royalty, franchising fee or any payment for designing made to any foreign
collaborator by a BOI registered company during the period of tax holiday under
8
Section 17A or Section 16D of the Inland Revenue Act, where the foreign direct
investment raised outside Sri Lanka exceeds USD 50mn, if such services are:
- essential in carrying out activities in Sri Lanka, and
- not obtainable in Sri Lanka,
as determined by BOI on a request made for that purpose.
Present
This source is not exempted under Section 13.
c. Profits of any Government assisted private school
Proposed
Profits and income of any Government assisted private school which is not
established under the Companies Act and registered with the Ministry of
Education and is mandated to follow the Government curricula set by the
Ministry of Education and the circulars issued by such Ministry.
Present
This source is not exempted under section 13.
d. Interest income
Proposed
Interest income from investment made on or after 01.01.2013 in:
- corporate debt securities , quoted in any stock exchange licensed by the
Securities and Exchange Commission of Sri Lanka ( including the deduction
of WHT under Section 135)
- municipal bonds issued with the approval of the General Treasury (including
the deduction of WHT under Section 134)
Present
This source is not exempted under section 13.
e. Profits and income from cultivation of renewable energy crops in
agricultural lands
Proposed
The profits and income of an undertaking from cultivation of renewable energy
crops in agricultural lands.
9
Present
No exemptions prevail.
f. For Individuals returning after the completion of foreign employment
Proposed
All taxes payable on the turnover of the businesses established by an individual
who returns from foreign employment and invests his or her earnings in these
businesses, and the profits and income thereof will be exempt for a period of 5
years.
Present
No exemptions prevail.
1.2.2 Concessionary rates
a. Unit Trust Management Companies
Proposed
The tax rate applicable for such companies will be reduced to 10%.
Present
Profits are currently taxed at 28%.
b. Poultry Farming
Proposed
The new tax rate applicable to these undertakings is 10%.
Present
The current tax rate is 12%.
c. Deemed Exports
Proposed
The following will be considered as deemed exports and a concessionary
tax rate of 12% will be applicable on the profits and income thereof.
10
- Supply of goods manufactured in Sri Lanka and provision of services to
foreign ships for which payments are in foreign currency.
- Sale of any product manufactured in Sri Lanka through a foreign exchange
earning account authorized by the Central Bank of Sri Lanka for which
payment is in foreign currency.
- Sale of goods (up to the quantity approved by the BOI as import replacement)
manufactured in Sri Lanka by an export oriented BOI registered company to :
Any BOI registered enterprise enjoying a tax holiday under Section 16C
, 17A or 16D of the Inland Revenue Act or the Strategic Development
Projects Act and permitted to import project related goods or raw materials,
duty free, under the provisions of the BOI agreement during the project
implementation period , or
Any person eligible to import specific goods duty free under any Government
authority.
Present
The current tax rate is 28%

d. Organic tea in bulk
Proposed
Organic tea in bulk will be classified as non - traditional goods and will be
taxed at 12%.
Present
It is considered under traditional goods and is taxed at 28%.
e. Turnover threshold for undertakings eligible for 10% concessionary rate
Proposed
The turnover threshold for undertakings engaged in the manufacture of any
article or provision of any service for which a concessionary tax rate of 10%
is applicable,has been increased to Rs.500mn.
Present
Current turnover threshold is Rs. 300mn.
11
f. Power generation Industry
Proposed
Tax rate of 12% is applicable on the profits and income of a person or
partnership from operating any mini hydro power project or other alternative
energy source.
Present
Profits and income are liable at 28%.
g. Companies obtaining a listing on the Colombo Stock Exchange
Proposed
Income tax payable will be reduced by 50% for a company, which lists its
shares after 1st April 2013 and issues 20% 20% of its shares to the general
public.
The 50% reduction is applicable for the year of assessment in which shares
are listed and two years immediately succeeding that year of assessment.
Present
Such a concession is not available.
h. Sale of manufactured goods to local market by export oriented companies
Proposed
The profits and income from sale of manufactured garments or ceramic
products in the local market by an export oriented enterprise will be liable at
the rate of 12%.
Present
A rate of 28% is applicable for local sales only.
i. BOI registered enterprises after the expiration of tax holiday
Proposed
If the taxation position of a BOI registered company after the expiration
of the tax exemption period is more disadvantageous than the taxation
position it would have been subjected to had it not been a BOI company,
the provisions of the Inland Revenue Act will apply.
12
Tax concessions under BOI agreement will not be extended through
supplementary agreements.
Present
BOI registered companies are not entitled to apply concessionary rates of
tax available under the Inland Revenue Laws, even if the concessionary rates
under the Inland Revenue Act are more attractive than BOI concessions as
per the BOI agreement.
1.2.3 Ascertainment of profits and income
The following expenses are allowed to be deducted under Section 25.
a. Capital Allowances
Proposed
Capital allowance rates applicable on plant, machinery and equipment ac-
quired after 01.04.2013 will be as follows, for:
technology upgrading purposes or introducing any new technology
50%
energy efficiency purposes, providing more than 30% of the total
requirement of the power generation out of alternative energy
resources - 100%
the establishment of back office system for stockbrokers to be
compliant with the CSE requirements in relation to risk
management 100%
any export industry 50%
Present
The rate applicable for plant and machinery in general is 33 1/3% with the
exception of the rate for energy efficient equipment being 50%, regardless
of the level of efficiency achieved.
b. Special Levies paid to the Government
Proposed
Special levies paid to the Government by a Public Corporation or Govern-
ment owned business undertakings are fully allowable.
Present
There is no such provision in respect of special levies .
13
c. Research and Development Expenses
Proposed
The triple deduction granted for expenditure on research and development
carried out through government institutions will be extended to research
carried out through private institutions as well.
Present
A triple deduction is applicable for research conducted within Sri Lanka
through a Government institution only.
d. Advertising Expenses

Proposed
Expenses incurred on specific sponsorship of international sports events
approved by the Minister of Sports are fully allowed with effect from
01/08/2012.
Present
25% of such expenditure is disallowed.
1.3 Withholding tax on interest income from corporate debt security
Proposed
Deduction of WHT will be on the full interest for the respective period, at the
time of issue.
Where the security is issued with a floating rate of interest, deduction will be
at the commencement of each reviewing period.
Where no deduction has been made up front, deduction will be at the time
of payment of interest.
Present
Deduction shall be made at the time such interest is paid or credited or when a
discount is allowed.
14
1.4 Administrative Provisions
(A) Inland Revenue Act
(i) Residency of an Individual
Proposed
Status of residency to be decided only through the 183 days rule.
Present
An individual who has been a resident for two or more consecutive years of
assessments will be treated as a resident until the year of assessment in which
he commences to be continuously absent from Sri Lanka for an unbroken period
of 365 days.
(ii) Time Bar
Proposed
Time bar period comes in to effect after 18 months from the completion of the
year of assessment.
Present
Time bar period comes in to effect after 32 months from the end of the year of
assessment.
(B) Tax Appeals Commission Act
The following changes will be made:
(a) Time period to hear and conclude appeals that were pending in the Board
of Review as at 31.03.2011 and transferred to Tax Appeals Commission to
be extended.
(b) Provisions to be introduced to continue hearing appeals that arose under
the Inland Revenue Act No. 28 of 1979, and No ,38 of 2000 or Finance Act
No. 11 of 2004.
(c) Provisions for stating cases for the opinion of the Courts of Appeal (by the
Tax Appeals Commission) will be included in the Tax Appeals Commission
Act itself.
15
(d) Time for preferring an appeal to the Commission will be modified to be one
month from the date of transmission of reasons for respective determination
of the Commissioner General.
(e) In respect of the deposit (25 % of tax) to be made as a prerequisite for
preferring an appeal to the Commission, changes will be made to refund
any excess of such deposit and transfer the tax to the Commissioner
General of Inland Revenue.
(f) The bank guarantee (in place of deposit), the beneficiary thereof and tenor
thereof will be specified.
16
2. VALUE ADDED TAX (VAT)
2.1 Exemptions
Proposed
The following exemptions are proposed
The supplies made by the following institutions:
Central Bank of Sri Lanka (Including the VAT on Financial Services)
Any Public Corporation to the extent of provision of services on behalf of the
Government, free of charge, out of the funds allocated by Parliament from the
Consolidated Fund or out of any loan arranged through the Government.
The supply of services to a unit trust by the unit trust management company.
The supply of hotel accommodation to any sportsman, organizer of any sport event or
sponsor arriving in Sri Lanka for participating in any sport event or activity connected
with sport.
Locally manufactured products out of coconut waste (coco peat, coir fiber, grow
pellets, grow bags, twist fiber, coconut husk)
The import or supply of the following items
Item HS Code
Bowsers 8704.23.10
8704.32.10
8704.23.20
8704.32.20
Bulldozers, graders, levellers, excavators 84.29
Fire fighting vehicles 8705.30.10
Road tractors for semi-trailers 8701.20.10
Raw materials for the manufacture of energy
saving bulbs
8543.90
The VAT exemption applicable on services which result in the improvement of quality,
character or value of any fabric or garment will be restricted to services provided to
non-exporters and extended to cover such services related to yarn.
17
2.2 Imposition of VAT for Wholesale and Retail Businesses
Proposed
Any person or a partnership who carries on a business of wholesale or retail trade
and makes a quarterly turnover/supplies including exempt turnover/supplies, of not
less than Rs. 500mn, will be liable to be registered for VAT. However, VAT will be
chargeable on liable supplies only.
Present
Wholesale and retail businesses are not liable for VAT.
2.3 Sale of Manufactured Goods to Local Market by Export Oriented Companies
Proposed
Enterprises engaged in the manufacture of garments or ceramic products will be
permitted to increase their domestic sales up to 40% and would be liable to pay VAT
and NBT on such local supply.
The Rs. 25/= per piece on sale of garments will be removed.
Present
Rs. 25/= per piece is payable on sale of garments in the domestic market.
2.4 Administrative Provision
SVAT Scheme

Relevant amendments will be incorporated to the VAT Act and the guidelines
issued for SVAT where necessary, with a view to further simplify the scheme.
The guidelines will be regularized through Gazette notifications.
Provisions will be made to make SVAT registration mandatory.
Penal provisions will be introduced for non-compliance with the statutory
requirements under the SVAT scheme.
18
Filing of VAT Returns
Proposed
The date for filing the VAT return will be extended to the 30th day of the following
month. The due date for payment which is the 20th date of the following month will
remain unchanged.
Present
The return has to be filed by the 20th day of the following month.
2.5 VAT Concessions to SME Sector
Any person or partnership, with an annual liable turnover/ supplies not exceeding
Rs. 12mn, from all the businesses carried on by such person or partnership will
not be liable to pay VAT.
Accordingly, the quarterly VAT threshold will be Rs. 3mn
2.6 Amnesty Provision
VAT payable by any person having a turnover not exceeding Rs. 300mn per year
from every trade or business carried on by such person for any period ending
prior to 1st April 2011, and having not complied with tax laws, will be exempted
from payment of such VAT, if the past earnings are invested prior to 31st March
2014, in any trade or business and such person duly complies with tax laws.
2.7 Effective date of Proposals
These VAT proposals are expected to come into effect from 1st January 2013.
19
3. NATION BUILDING TAX (NBT)
3.1 Liable turnover
Proposed
Any person or partnership, with an annual liable turnover not exceeding Rs.12mn, from
all the businesses carried on by such person or partnership, including wholesale or
retail business, will not be liable for NBT. Accordingly, the threshold for NBT will be
Rs.3mn per quarter.
Present
The current threshold for NBT is Rs.500,000 per quarter. Rs.2mn per annum.
3.2 Exemptions
Proposed
Exemption from NBT have been proposed for the following.
The following articles have been included under excepted articles
(PART I, EXCEPTED ARTICLES)
Article HS Code
Solar panel modules, accessories or solar home
systems for the generation of solar power energy
8501.31.10 8513.10.10
9405.10.10 9405.10.20
9405.20.10 9405.20.20
9405.40.30 9405.40.40
9032.89.10 8539.31.20
8541.40
Coal 2701.11
2701.12
2701.19
The import of goods for any international sports event approved by the Minister of
Finance.
Gems imported subject to Special Service Fee at the rate specified in the Gazette
published under Section 6A (a) of the Customs Ordinance, (Chapter 235) including
any subsequent sale of such gems as processed gems.
20
NBT on local sales of imported gems that is not subject to any processing (imposed
in lieu of Turnover Tax) remains taxable.
The turnover of the following institutions will not be liable for NBT
Central Bank of Sri Lanka
Any Public Corporation to the extent of provision of services allocated on behalf
of the Government, free of charge out of the funds voted by Parliament from the
Consolidated Fund or out of any loan arranged through the Government.
Present
Services provided by a public corporation, insofar as such services are in respect of
the export of any article from Sri Lanka are not liable for NBT.
3.3 Amnesty provisions
a. NBT payable by any person having turnover not exceeding Rs. 300 Million
per year from every trade or business for any period ending prior to April
1, 2011, and not complied with NBT laws, will be exempted from payment
of NBT, if the past earnings are invested prior to 31.03.2014, in any trade or
business and duly comply with tax laws; and
b. The profits and income from such trade or business (carried on by
capitalizing such earnings) will be exempt from income tax for a period of
five years.
21
4. ECONOMIC SERVICE CHARGE (ESC)
4.1 Exemptions
a. Funds voted by Parliament from the Consolidated Fund or from any loan
arranged through the Government for the provision of services by any
Public Corporation on behalf of the Government of Sri Lanka will not be
treated as turnover for the purpose of ESC.
b. Central Bank will be exempt from ESC.
4.2 Amnesty Provisions
a. ESC payable by any person having turnover not exceeding Rs. 300 Million
per year from every trade or business for any period ending prior to April
1, 2011, and not complied with ESC tax laws, will be exempted from
payment of ESC , if the past earnings are invested prior to 31.03.2014, in
any trade or business and duly comply with tax laws; and
b. The profits and income from such trade or business (carried on by
capitalizing such earnings) will be exempt from income tax for a period of
five years.
22
5. MISCELLANEOUS
5.1 CESS
Cess will be increased or imposed on import of the following items :
Item H S Headings/ H S Code
Dairy products 04.03 04.04 04.06
Birds eggs 04.08
Edible products of animal origin 04.10
Cut flowers and flower buds, Foliage 06.03 06.04
Fresh, preserved, dried vegetables
and fruits/ Other vegetable and fruit
products
07.02 07.04 07.05 07.06
07.07 07.08 07.09 07.10
07.11 07.12 07.14 08.01
(except 0801.31.10 and 0801.31.90) 08.02
08.03 08.04 (except 0804.10) 0805.10.20
0805.40 0805.50 0805.90 0806.20
08.07 0808.30 0808.40 08.09
08.10 08.11 08.12 08.13
08.14 20.01 20.02 20.03
20.04 20.05 20.06 2007.91
2007.99 20.08 (except 2008.30.10 and 2008.50.10)
20.09 (except 2009.11.10)
Edible oils 15.08 15.09 1512.21 1512.29
1531.21 1513.29 15.14 15.15
15.16.20
Margarine 1517.10
Sausages and preserved meat
products
16.01 1602.32 1602.50 1602.90
16.03
Honey and jaggery 17.02
Confectionaries 17.04 18.06
Bakery products 19.05
Food preparations 21.03 21.04 21.05
Mineral water 22.01 22.02
Vinegar 22.09
23
Salt 25.01
Lubricants 2710.19.80
Gauze and bandage 30.05 58.03
Putty 3214.10
Soap 34.01 (except 3401.20)
Adhesives 3506.91 3903.90.10 3905.12 3905.21
3906.10.10 3906.90.10 3919.90
Handles for toothbrushes 3926.90.60
Tyres for cars and light truck 4011.10 4011.20.90
Soap wrappers 48.11 (except 4811.10)
Wet cleansing tissues 56.01
Fabrics 50.07 51.11 51.12 51.13
52.08 52.09 52.10 52.11
52.12 53.09 54.07 54.08
55.12 55.13 55.14 55.15
55.16 58.01 58.02 5804.21
5804.29 5804.30 58.06 58.09
58.11 59.01 60.01 60.02
60.03 60.04 60.05 60.06
Steel 7214.20.90 7306.61.90
Aluminum wire 7605.11
Radiators and parts 8708.91
Taxi meters 9029.10.10
Prefabricated buildings 94.06
24
Urinals Water less 3922.90
Jute fabrics 53.10
Groats and meal of maize (corn) 1103.13
Natural honey 04.09
Cinnamon 0906.11
Cloves 0907.10
Natural Sands
Waste 2505.10.10
Other 2505.10.90
Other 2505.90
Quartz 2506.10.10
Clay 25.07
Phosphate 2510.10.10
Stones (Emery, corundum) 2513.20
Stones (Gravel, pebbles, etc) 2517.49
Mica
Crude 2525.10
Waste 2525.30
Steatite
Not crushed 2526.10
Crushed 2526.20
Other minerals 25.30
Ilmanite 2614.00.10
Rutile 2614.00.20
Titanium 2614.00.90
Zirconium 2615.10
Niobium, tantalum. vanadium 2615.90
Cess on import of the following items will be reduced/ removed :
Cess on exports of following items will be increased :
25
Item H S Code
Go Karts 8703.21.62
Trishaws 8703.21.51
8703.31.60
8703.21.54 8703.21.55 8703.31.50
Motor Cars (less than 1,000 cc) 8703.21.69 8703.21.79 8703.21.92 8703.21.93
Trucks g.v.w. is between 5 & 20
tonnes
8704.22.30 8704.22.40 8704.32.30 8704.32.40
Trucks g.v.w. is exceeding 20
tonnes
8704.23.30 8704.23.40
Single Cabs 8704.21.81 8704.21.82 8704.31.71 8704.31.72
Aerated Water 2201.10.90 2202.10 2202.90.90
Pipe Tobacco Exception will be removed
Hearses 2403.19.10 2403.91.10 2403.99.10
Item H S Code
Chilies crushed or ground 0904.22.10
Canned fish 1604.11 1604.12 1604.13 1604.14
1604.15 1604.16 1604.17 1604.19
1604.20
Black gram 0713.31.90
Maldive fish 03005.59.10
Grapes 0806.10
Coriander crushed or ground 0909.22
Turmeric crushes 0910.30.90
Ground Nut shelled 1202.42
Mustard seeds 1207.50
Seeds of cumin 0909.30
Palm oil crude and refined 1507.10 1507.90 1511.10 1511.90.10
1511.90.20 1511.90.90 1512.11 1512.19
1513.11.11 1513.11.19 1513.11.21 1513.11.29
1513.19.10 1513.19.90
5.2 Excise (Special Provisions) Act No 13 of 1989
The Excise (SP) Duty on the following HS Codes will be revised:
5.3 Special Commodity Levy Act No. 48 of 2007
In order to encourage local industries, the Special Commodity Levy presently
applicable on the following items will be revised.
26
5.4 Betting & Gaming Levy
The present tax structure of the business of betting and gaming will be revised
as follows:
The annual levy payable will be revised as follows:
(a) The business of bookmakers:
Proposed
- Betting business through agents - Rs. 2,000,000 per year
- Where live telecast facilities are used - Rs. 500,000 per year
- Where live telecast facilities are not used - Rs. 25,000 per year
Present
- Betting business through agents - Rs. 1,000,000 per year
- Where live telecast facilities are used - Rs. 300,000 per year
- Where live telecast facilities are not used - Rs. 50,000 per year
(b) The business of gaming
Proposed
Gaming including rudjino - Rs. 100mn per year
Present
Gaming including rudjino - Rs. 50mn per year
Proposed
In lieu of indirect taxes, a levy of 5% of gross collection for each month in addi-
tion to the levy under paragraph (a) and (b)
Present
Indirect taxes were applicable.
Betting and Gaming Activities
Proposed
The present income tax at the rate of 40% will remain unchanged. No operator
is permitted to carry on a business of betting or gaming activities without a reg-
istration from the Department of Inland Revenue for tax purposes.
27
Present
Income tax rate is 40%. But an operator is not required to register with the De-
partment of Inland Revenue.
5.5 Port and Airport Development Levy (PAL)
Proposed
Additional exemptions are given below:
Medical equipment to be donated to an institution which provides free health-
care services with the approval of Ministry of Health.
Present
Above articles are subject to PAL at 5%
Proposed
PAL on the consumables for the textile & apparel industry under the following
H.S Codes Nos will be reduced to 2.5%
Description H.S Code
Solar panel modules, accessories or solar
home systems for the generation of solar
power energy
8501.31.10, 8541.40, 8513.10.10, 9405.10.10,
9405. 10. 20, 9405. 20. 10, 9405. 20. 20,
9405.40.30,9405.40,9032.89.10 8539.31.20
Coal 2701.11, 2701.12, 2701.19
Description H S Code
Sinkers, needles and other articles used in forming stitches 84.48.51
Sewing machine needles 84.52.30
Other parts of sewing machines 84.52.90
Ironing parts 84.51.90
Organic surface active agents 34.02
Anionic 34.02.11
Cationic 34.02.12
Non-ionic 34.02.13
Other 34.02.19
8708.91 Radiators and parts
9029.10.10 Taxi meters
94.06 Prefabricated
buildings
28
5.6 Telecommunication Levy
Services provided through internet / broadband, to facilitate IT and BPO sectors
is reduced to 10%
Proposed
IT/BPO sectors 10%
For others 20%
Present
The telecommunication levy for all sectors, including IT/BPO sectors is 20%
5.7 Investment Fund Account (IFA)
The investment in sustainable energy sources including solar power and women
entrepreneurship venture capital projects up to Rs. 10 Mn each will be added as
qualifying sectors for the lending of funds under the Investment Fund Account.

Where the funds in the investment fund account have not been utilized as per
the Guidelines issued by the Central Bank of Sri Lanka Inland Revenue Depart-
ment by 30.06.2013, the respective institutions are required to transfer the funds
lying to the credit of the funds to the Treasury.
5.8 Amendments to Strategic Development Projects Act No 14 of 2008
Provisions will be incorporated to exempt Cess on importation of raw materials,
during the project implementation period, in cases where the required raw ma-
terials are not available in Sri Lanka at the required quantity.
5.9 Amendments to Finance Acts
Taxes/ levies paid on raw materials imported to be used for manufacture of
goods for export, which are subject to the following taxes which are not exempt-
ed under the relevant legislations will be rebated on specific cases identified in
line with the provisions of the Customs Ordinance:
(a) Cess under Export Development Act;
(b) Special Commodity Levy under the Special Commodity Levy Act No. 48 of
2007.
The definition of semi- luxury dual purpose motor vehicle referred to in the
Finance Act No. 16 of 1995, will be amended to exclude any single cab or
light truck less than GVW 3500 Kg used for transport of goods, therefrom
29
such vehicles will not be liable to semi luxury dual purpose motor vehicle
levy payable on or after 01.01.2013.
Part IV of the Finance Act No 12 of 2012 will be amended to provide for the fol-
lowing:
(a) To publish regulations to form the basis in which the guideline and ap-
proval would be granted.
(b) To determine the scope of the exemptions to be granted
(c) To declare the relevant areas to be brought under the Acts.
5.10 Embarkation levy / Visa fee
(a) The present embarkation fee will be increased to US$ 25.00
(b) Online visa fee will be increased by US$ 5.00
5.11 Stamp Duty (Special Provisions Act No. 12 of 2006)
Stamp duty on the instrument of transfer of stocks transferred by any per-
son to a margin trading account (slash account) and vice versa will be
exempted.
Charges
5.12 Transfer Pricing Legislation
(a) Separate provisions will be made for the determination of arms length price
of goods and services in local transactions of associated undertakings;
(b) Provisions will be introduced for advance pricing arrangements.
(Section 104 of the Inland Revenue will be amended)
Instrument Duty Rs.
Affidavit 250.00
Policy of instrument 1/- for every Rs. 1,000 or part thereof or the
aggregate of the premia payable on the policy.
Notary warrant 2000/-
Periodic licence to carry on trade
or business etc.,
2,000/ or 10% of licence whichever is less
Licence for sale of liquor 20,000
Demand for payment on usage of
a credit card
15/- for every 1,000/- or part thereof
30
Description Rs.
For registration of a limited Company 15,000
For registration of an unlimited company 12,500
For registration of a company limited by guarantee 25,000
For registration of mortgages, charges and debentures 5,000
For registration of an annual return 5,000
The registration of any document required or authorised to be registered or
required to be delivered, sent, given or forwarded to filed with, the Registrar
General of Companies, other than the notices and reports required to be
delivered to the Registrar General of Companies by a receiver or manager, an
administrator or a liquidator
1,000
For approval of a name of a company (Name Request) 1,000
For inspection of a file kept by the Registrar General of Companies 500
For certification of any document or extract thereof filed with the Registrar
General of Companies
500
For inspecting the register of charges 500
For registration of Company Secretaries 5,000
Amount to be credited to a bank to defray the expenses of an off-shore company
for the purpose of its office in Sri Lanka
USD
100,000
For registration of an off-shore company 100,000
For renewal of an off-shore company 100,000
For registration of a place of business in Sri Lanka by an Overseas Company 50,000
For re-registration of an existing Company 10,000
Description Rs.
Marriages
Registration of Marriages by a Christian Minister 100.00
Registration of Marriages (General)
i. Entry of a marriage notice at the office 100.00
ii. Entry of a marriage notice at another place 20.00
iii. Registration of a marriage at the office 750.00
iv. Registration of a marriage outside the office (section 38-1) 1,000.00
v. Registration of a marriage outside the office (section 38-2) 5,000.00
vi. Issue of Registrars certificate 1,000.00
5.13 Changes to fees and charges
The Department of Registrar of Companies
The Registrar Generals Department
31
i. Receiving a marriage notice under section 16(1) and (2) 50.00
ii. Receiving a marriage notice under section 16(3) 50.00
iii. Receiving a marriage notice under section 16(4) 100.00
iv. Obtaining a special licence 500.00
v. Obtaining a licence to register a marriage outside the office between 6.00
a.m. to 6.00 p.m
100.00
vi. Obtaining a licence to register a marriage outside the office between 6.00
p.m. to 6.00 a.m
500.00
vii. Registration of a marriage at the office 100.00
viii. Registration of a marriage outside the office
Within 6.00 a.m. to 6.00 p.m 500.00
Within 6.00 p.m. to 6.00 a.m 1,000.00
Obtaining a certified copy of Kandyan marriage certificate 1,000.00
Birth
Registration of Births Occurred at Sri Lanka or Foreign Country No Change
Obtain a Certified Copy of the Certificate of Birth
If the number of the certificate of birth and the registered date is known 50.00
If the number of the certificate of birth and the registered date is not known
for search of birth registers for period of 03 months 100.00
for search of birth registers for period of 02 years 200.00
Registration of Kandyan Marriages
Description Rs.
Alteration of Information in a Birth Register 25.00
Registration of Past Births
within 12 months of occurrence
more than 12 months of occurrence
10.00
25.00
Translate Birth Certificate 200.00
Deaths
Registration of a death which occurred in Sri Lanka or Foreign Country No Change
Alteration of Information in a Death Register 25.00
Obtain a Certified Copy of the Certificate of Death
i. If the death certificate number & the registered date is known 50.00
ii. If the death certificate number & the registered date is not known
iii. - for search of death registers for period of 03 months
for search of death registers for period of 02 years
50.00
150.00
Registration of a Past Death
i. Within 12 months of occurrence of the death 10.00
ii. More than 12 months of occurrence of the death 25.00
Translate Death Certificate 200.00
32
Description Rs.
Original of Deeds sought to be registered at the Land registry per document 5.00
Revenue to Central Government
Charge levied on a Caveat effective of 06 months
(to be in effect for a period of 02 years) 2,500.00
Charge levied for a Land Registry Search 500.00
Stamp Fees for Annual Notarial Registration 1,000.00
Charges to be paid by a Registered Attorney for Case File records (per
proxy instead of a case)
200.00
Vehicle Category New Revenue
Licensing fee
(Rs.)
Lorry, Ambulance, Hearse
Petrol
up to 2,000 kg 1,500
exceeding 2,000 kg but not exceeding 5,000 kg 2,000
exceeding 30,000 kg 7,000
Day Book entry Registration Fees
Revenue Licensing Annual Fee for Motor Vehicles
33
Licensing fee
(Rs.)
Diesel
up to 2,000 kg 3,000
Motor Bicycles
Three-wheelers
Buses
Omnibus belonging to persons other than SLTB 150
Private motor coach 500
Dual purpose vehicles
Petrol
up to 1,000 kg 2,000
Diesel
up to 1,000 kg 3,500
34
Licensing fee
(Rs.)
Motor Car
Petrol
up to 762 kg 2,000
exceeding 762 kg but not exceeding 1,016 kg 2,200
Diesel
up to 762 kg 3,100
exceeding 762 kg but not exceeding 1,016 kg 4,000
35
6. CUSTOMS DUTY
The policy on customs duty structure remains unchanged except for the following
revisions :
H S Code Proposed Customs Duty
1. To promote local Livestock industry
Milk powder
0402.10 30% or Rs. 125/- per kg
(A Duty waiver of 15% or Rs. 18/- per kg)
0402.21 30% or Rs. 125/- per kg
0402.29 30% or Rs. 125/- per kg
2. To encourage local value added industries
Glass beads
7018.20 Free
Maize starch
1108.12 15%
Molded or pressed articles of paper pulp
4823.70 5%
Polyester resin
3907.91.00 Free
Pneumatic tyres of rubbers
4011.20.10 (New NSH) 15% or Rs. 70/- per kg
4011.20.90 (New NSH) 15% or Rs. 70/- per kg
4011.10 30% or Rs. 140/- per kg
Wet cleaning Tissues
5601.21.10 (New NSH) 30%
5601.21.90 (New NSH) Free
5601.22.10 (New NSH) 30%
5601.29.10 (New NSH) 30%
Structure and parts of structure - Iron or steel
7308.90.90 30%
36
H S Code Proposed Customs Duty
Coated Papers Printing or graphic purposes
4810.22 5%
4810.29 5%
3. To promote use of water preserving sanitary ware
Urinals Water less
4. To promote use of renewable energy sources
Day lighting devices which capture sunlight transfer & diffuse light in a building interior
7610.90.10 (New NSH) 5%
9405.50.20 (New NSH) 5%
5. To make the taxes on imports to be in line with the domestic taxes
Beer made from malt
2203.00 Rs. 150/- per 1
Spirit
2207.10 Rs. 250/- per 1
2207.20.10 Rs. 200/- per 1
2207.20.20 Rs. 200/- per 1
2207.20.90 Rs. 200/- per 1
Spirits obtained by distilling grape wine or grape marc
2208.20 Rs. 1,250/- per 1
Whiskies
2208.30 Rs. 1,250/- per 1
Rum
2208.40.10 Rs. 1,250/- per 1
2208.40.90 Rs. 1,250/- per 1
Gin & Geneva
2208.50 Rs. 1,250/- per 1
Vodka
2208.60 Rs. 1,250/- per 1
Liquors and cordials
2208.70 Rs. 1,250/- per 1
2208.90.10 Rs. 1,250/- per 1
2208.90.90 Rs. 1,250/- per 1
37
OUR COMMENTS
Budget overview
The 2012 budget aims to cut the budget deficit to 5.8% whilst maintaining an economic
growth of 7.5%.
The budget proposals have been formulated by targeting the following three important
objectives to be realized over the next three years commencing 2013:
- Transform the country in to a poverty-free upper middle income economy
- Strength food, water and environment security
- Place the country on a path to realize quality education, skills development,
research and technology revolution
The budget proposals are in line with the objective of transforming Sri Lanka into upper
middle income country by reaslising a per capita income of US$ 4,000/- by the year
2016.
The proposals aim at further enhancing the environment to promote domestic
investments and foreign direct investments.
Our comments on some of the proposals are given in the ensuing paragraphs.
Benefits to Small and Medium Entities (SME)
Several favourable proposals have been made to promote small and medium
enterprises. The system and procedures concerning taxes and levies imposed by the
Government as well as provincial and local authorities have been simplified.
A notable exemption is where a person or partnership with an annual liable turnover
/ supplies not exceeding Rs. 12mn not being liable to Nation Building Tax (NBT) and
Value Added Tax (VAT). This is a significant increase from the previous threshold for
VAT and NBT, which were set at Rs. 2.5mn and Rs. 2mn respectively. Further, it has
been proposed to revise the annual turnover of Rs. 300mn for manufacturers and
service providers, referred to under section 59b, to Rs. 500mn for the application of
the concessionary tax rate of 10%.
With these proposals it is expected that the SME sector would enjoy considerable tax
savings that would allow them to expand their businesses and also encourage new
entrepreneurs.
Impact of telecommunication levy on IT and BPO sectors
The present 20% rate of telecommunication levy will be reduced to 10% in respect of
services provided through internet / broad band, with a view to facilitate IT and BPO
sectors.
Developments in tourism industry
A 25% discount on the lease rental as determined by the Government Chief Valuer
for local investors has been proposed. Further, concessions on land leasing will be
offered, if a foreign investor forms an equity partnership, of which at least 30% is
38
represented by the local investor. However, the sale of state land to foreigners would
be prohibited.
The above proposal is highly encouraging for local investors to set up tourism related
businesses and would also allow foreign direct investments to flow to the country
through local partnerships.
Moreover, supply of hotel accommodation to any sportsman, organizer of any sport
event or sponsor arriving in Sri Lanka for participation in any sport event or activity
connected with sport will be exempt from VAT.
Specific sponsorship expenses of international sporting events would be fully allowed
as a deduction for tax purpose provided these are approved by the Minister of Sports.
The above proposals are likely to promote the hosting of sporting activities and thereby,
indirectly boost tourism.
Relaxations in foreign exchange control
Corporate entities could borrow up to US$ 10mn per annum over the next three years
without having to obtain approval from the Exchange Control Department. For licensed
commercial banks, the limit goes up to US$ 50mn. This would enhance access to
global financial markets.
Further, entities engaged in the supply of goods and services to tourism and foreign
businesses would now be permitted to accept foreign currencies
Value Added Tax and Nations Building Tax on wholesale and retail business
For the first time, the wholesale and retail business has been brought in to the VAT and
NBT system. The imposition of VAT and NBT on wholesale and retail businesses, the
quarterly turnover / supplies of which exceeds Rs. 500mn, would contribute to expand
the tax base and also promote equity in taxation with the high spending society being
made to absorb the additional tax.
This proposal aims at safeguarding several small and medium sectors. As such, small
boutiques and shops will not be liable for these taxes. It would be interesting to see
how this would affect the pricing of the products in supermarket.
Concessionary tax rates
Several concessionary tax rates have been proposed for different sectors including
unit trust management companies, poultry farming, organic tea in bulk, mini hydro
power project or other alternative energy sources.
Another concession is the three year tax holiday calculated at 50% of the applicable
tax rate, to be granted to companies listed newly in the Colombo Stock Exchange with
a minimum public holding of 20%.
The above concessions would enhance the development of business sectors as well
as the capital market.
In conclusion, the 2013 budget aims at reducing poverty, uplifting the living conditions
of the poor through equity in taxation, discouraging imports, boosting exports and
being cautious about over burdening the society at large. It is a balanced budget for
the people.
39
2013/14
%
2012/13
%
2011/12
%
2010/11
%
2009/10
%
2008/09
%
Income Tax
Quoted Companies
Taxable Income > Rs. 5 Mn.
First 5 years 28 28 28 33
1
/
3
33
1
/
3
33
1
/
3
Thereafter 28 28 28 35 35 35
Taxable Income
<Rs. 5 Mn. 12 12 12 15 35 15
Unquoted Companies
Taxable Income >Rs. 5 Mn. 28 28 28 35 35 35
<Rs. 5Mn. 12 12 12 15 15 15
Any Holding Company
Subsidiary or Ass.Company
Taxable Income <Rs. 5 Mn. 28 28 28 35 35 35
Others
Small Medium Industries (SMI)
with turnover <Rs. 300 Mn. 10 10 10 35 35 35
Provident Funds 10 10 10 10 10 10
Clubs and Associations 10 10 10 20 20 20
Non Government
Organizations
28 28 28 30 30 3
Partnership 8 8 8 10 10 10
Manufacture & sale or imports
and sale of products of
tobacco and liquor 40 40 40 35 35 35
Operations & Maintenance of
Facilities for Storage, local
Development Software or
supply of Labour
10 10 10 35 35 35
Educational Services 10 10 10 35 35 35
Deemed Dividend Tax 15 15 15 15 15 15
Profit Remittances -
(Non Resident Companies)
(as a % of remittance)
10 10 10 10 10 10
Foreign Dividends Exempt Exempt Exempt Exempt Exempt 10
Appendix A
Summary of Corporate Rates of Taxes
Y/A 2008/2009 - 2013/2014
40
Note :
(1) To be paid by both buyer and seller
(2) Of turnover
(3) Divisible profit in excess of Rs. 600,000/-
2013/14
%
2012/13
%
2011/12
%
2010/11
%
2009/10
%
2008/09
%
Concessionary Rate
Qualified Export 12 12 12 15 15 15
Profits / Construction/
Tourism
12 12 12 15 15 15
Agriculture 10 10 10 Exempt Exempt Exempt
Venture Capital
Companies
12 12 12 20 20 20
Unit Trust Management
Companies
12 28 28 35 35 35
Petroleum Exploration 12 12 12 15 15 15
Exports with 65% value
addition
10 10 10 15 15 15
Share transaction levy
on sale of shares of
quoted companies
0.3 (1) 0.3 (1) 0.3 (1) 0.2 (1) 0.2 (1) 0.2 (1)
ESC 0.1 - 1 (2) 0.1 - 1 (2) 0.1 - 1 (2) 0.05 -1 (2) 0.05 -1 (2) 0.05-1(2)
Partnership 8 (3) 8 (3) 8 (3) 10 (3) 10 (3) 10 (3)
41
2013/14
%
2012/13
%
2011/12
%
2010/11
%
2009/10
%
2008/09
%
Withholding Tax
Interest &Royalty paid 10 10 10 10 10 10
Interest & Royalty paid - to
a person outside Sri Lanka
(subject to DTTA )
15 15 15 15 15 15
Rent, annuities and ground rent
- Non residents 20 20 20 20 20 20
Dividends 10 10 10 10 10 10
Interest on listed debentures &
debt securities
10 10 10 10 10 10
Management fees 5 5 5 5 5 5
Reward payments by Govt.-
Lottery Prizes, Winning from-
Betting and Gambling 10 10 10 10 10 10
Capital Allowances
Buildings 10 10 10 6
2
/
3
6
2
/
3
6
2
/
3
Plant, Machinery & Fixtures 33
1
/
3
33
1
/
3
33
1
/
3
12 12 12
Software 25 25 25 25 25 25
Software (locally developed) 100 100 100 100 100 100
Commercial vehicles and office
furniture 20 20 20 20 20 20
Bridges, Railway 6
2
/
3
6
2
/
3
6
2
/
3
6
2
/
3
6
2
/
3
6
2
/
3
Plant & Machinery for
healthcare, printing on paper,
gem cutting,
polishing, rice milling &
packaging
33
1
/
3
33
1
/
3
33
1
/
3
33
1
/
3
33
1
/
3
33
1
/
3
Energy efficient high tech plante
machinery and equipment 50 50 - - - -
42
2013/14
%
2012/13
%
2011/12
%
2010/11
%
2009/10
%
2008/09
%
Deduction of Losses (restricted)
Life Insurance
business
Loss
restricted
to Life
Insurance
business
profit
Loss
restricted
to Life
Insurance
business
profit
Loss
restricted
to Life
Insurance
business
profit
Loss
restricted
to Life
Insurance
business
profit
Loss
restricted
to Life
Insurance
business
profit
Loss
restricted
to Life
Insurance
business
profit
Finance Leasing
business
Loss
restricted
to finance
leasing profit
Loss
restricted
to finance
leasing profit
Loss
restricted
to finance
leasing
profit
Loss
restricted
to finance
leasing profit
Loss
restricted
to finance
leasing
profit
Loss
restricted
to
finance
leasing
profit
Limited to 35 % of total
Statutory
Income
35 % of total
Statutory
Income
35 % of total
statutory
income
35 % of total
statutory
income
35 % of total
statutory
income
35 % of
total
statutory
income
Value Added Tax
Standard 12 12 12 15 15 15
Zero 0 0 0 0 0 0
Luxury 12 12 20 20 20 20
NBT
Standard 2 2 3 3 - -
Retail & Wholesale
business
2 of 50 % of
turnover
2 of 50 % of
turnover
2 of 50 % of
turnover - - -
Distributors 2 of 25 % of
turnover
2 of 25 % of
turnover
2 of 25 % of
turnover
43
Sri Lanka
%
India
%
Bangladesh
%
Singapore
%
Malaysia
%
Corporate Tax
Quoted Company 28 32.4 27.5 17 25
Unquoted Company 28 32.4 37.5 17 25
Clubs and Associations 10 30.90 10 - 25
(Income from
members not
liable)
17 0 - 26
Foreign Dividends Exempt 16.22 Exempt Exempt Exempt
Remittance Tax
( Non resident company) 10 - 10 - 37.5 - -
Capital Gains (Listed) - 16.22
(Short term)
15 Exempt Exempt - Liable
only on sale of
land & building
Partnership Tax 8 30.90 10 - 25 Exempt -
Withholding Tax
Interest 10 42.02 10 15 15
Royalty 10 or 15 10.51 10 10 10
Dividends 10 21.01 10 Exempt Exempt
Rent - - - 15 10
Management Fee 5 10.51 10 17 -
Directors Fees 10 or 16 Taxed at
normal rates
- 20 -
Capital Allowance
Buildings 10 10 10 General
20 Factory
25 Initial
3 Annual
10 Initial
3 Annual
Plant & Machinery 33
1
/
3
15 20 33
1
/
3
20 Initial (General)
14 Annual
(General)
20 (Heavy)
Furniture 20 10 10 33
1
/
3
20 Initial
10 Annual
Motor Vehicles 20 15 20 33
1
/
3
20
Computers 25 60 30 100 20 Initial
80 Annual
Appendix B
Comparison of Current Corporate Taxes, Withholding Taxes, Indirect Taxes etc., Y/A
2011/2012
44
Indirect Taxes
Value Added Tax (VAT) 12 0 &14.5 15 7 5 or 10
Nation Building Tax
(NBT)
(Retail / Wholesale )
2
2 of 50 of
T/O - - - -
Economic Service
Charge (ESC)
0.1 to 1 - - - -
Customs Duty 0 - 32 24.42
average
- - -
Excise Duty 0 - 22 10.30 - - -
45
Appendix C
Comparison of Effective Tax Rates for Resident Individuals
Y/A 2002 / 2003 - 2012 / 2013
An Employee whose salary is Rs. 150,000 per month (1)
Rs. 200,000 per month (2)

Y/A Personal
Allowance
Taxable Income Income Tax Average
Effective Rate

Rs.
(1)
Rs.
(2)
Rs.
(1)
Rs.
(2)
Rs.
(1)
Rs.
(2)
Rs.
2002 / 2003 240,000 960,000 1,560,000 264,000 474,000 22.0 26.3
2003 / 2004 240,000 960,000 1,560,000 234,000 414,000 19.5 23.0
2994 / 2005 300,000 900,000 1,500,000 198,000 378,000 16.5 21.03
2005 / 2006 300,000 900,000 1,500,000 105,000 275,000 8.8 15.3
2006 / 2007 300,000 900,000 1,500,000 105,000 280,000 8.8 15.6
2007 / 2008 300,000 900,000 1,500,000 105,000 280,000 8.8 15.6
2008 / 2009 300,000 900,000 1,500,000 105,000 280,000 8.8 15.6
2009 / 2010 300,000 900,000 1,500,000 75,000 180,000 6.2 10.0
2010 / 2011 300,000 900,000 1,500,000 75,000 180,000 6.2 10.0
2011 / 2012 500,000 700,000 1,300,000 36.000 96,000 3.0 5.3
2012 / 2013 500,000 700,000 1,300,000 36,,000 96,000 3,0 5.3
Appendix D
Retiring Benefits - Lump sum payment ( Gratuity, EPF, ETF, Compensation for loss of employment )
Rate
Y/A Nil 5% 10%
2007/2008 (1)(A) First Rs. 5,000,000 Next Rs. 1,000,000 Balance
2011/2012 (1)(A) First Rs, 5,000,000 Next Rs. 1,000,000 Balance
(A) Government Sector - All Retiring Benefits are exempt from tax.
(1) If the period of Provident Fund contribution is over 20 years
(2) If the period of \Provident Fund contribution is below 20 years
(3) Provident Fund Retiring benefits exempt from 2011/2012
46
ABOUT SJMS ASSOCIATES
SJMS Associates is a multi-disciplinary professional services firm providing audit,
financial advisory, tax advisory, management solutions and corporate recovery
services to a wide range of clients. SJMS Associates is an independent correspondent
firm to Deloitte Touche Tohmatsu, a global leader in professional services with over
180,000 people in 150 countries / locations.
Our practice is one of the top accounting and auditing firms in Sri Lanka, with twelve
partners and 380 staff. Our clients operate in diverse industries such as advertising,
apparel, retail, financial services, manufacturing to hospitality and leisure. The firm has
over 35 years presence in Sri Lanka and has been associated with Deloitte Touche
Tohmatsu since 1997.
Services provided :
Audit & Assurance Tax Compliance & Planning
Financial Assurance Corporate Tax Compliance
Internal Audits Indirect Taxation including VAT and
Excise Duty
Forensic Services Expatriate Tax Consulting
Due Diligence International Taxation
Outsourced Accounting Services Strategic Tax Planning
Information System Audits

Management Consulting
General Management Consulting
Business Strategy Consulting Restructure & Corporate Recovery
Foreign Investment Services
Privatization Services Restructuring / Reorganization Services
Human Resources Consulting Corporate Closure Management
Systems and Solutions Liquidation Services
Corporate Finance

Mergers and Acquisitions
Corporate Finance & Private Capital
Transaction Execution
Valuations
47
Contacts
SJMS Associates Tel. + 94 11 5444400 / 5444408/09 sjmsa@sjmsassociates.com
02 Castle Lane Fax. + 94 11 2586068
Colombo 04.
Ms. S. Y. Kodagoda Tel. +94 11 5444400/ 5444410 sarala@sjmsassociates.com
Mr. P. Sivasubramaniam Tel. + 94 11 5444400 / 5444408/09
Mr. D. Dahanayake Tel. + 94 11 5444400 / 5444408/09 nirmala@sjmsassociates.com
Mr. M. Ratnayake Tel. + 94 11 5444400 / 5444408/09 ratnayake@sjmassociates.com
Ms. I. Karunaratne Tel. + 94 11 5444400 / 5444408/09 indumali@sjmsassociates.com
Ms. L. Fernando Tel. + 94 11 5444400 / 5444408/09 laleena@sjmsassociates.com
Polytechnic Building Tel. + 94 11 5360151 - 4 / 5667829
30 - 2/1 Galle Road Fax. + 94 11 2507522
Colombo 06
Ms. T. Varathaluckshmy Tel. + 94 11 5444400 / 5444408/09 varatha@sjmsassociates.com
Branch
SJMS Associates Kandy Tel. + 94 081 2228684 or 5628649
25/1/1 George E. de Silva Fax. +94 081 2203071
Mawatha
Kandy
Mr. R. Rajendran ramiahco@hotmail.com

Correspondent Office
Ranaweera Nagasinghe & Co. Tel. + 94 041 2222365
41/5B Old Market Road Fax. + 94 041 2221415
Kotuwegoda
Matara
Mr. S.J. Ranaweera sranaweera@sltnet.lk
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SJMS Associates Budget Highlights 2013

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08th November 2012

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