The government is projected to incur a loss of approximately Rs. 60 billion in tax revenue following the recent revision of the personal income tax-free threshold, according to the Inland Revenue Department (IRD).
The threshold, which was previously set at Rs. 1.2 million annually, has been increased to Rs. 1.8 million.
Deputy Commissioner General of the Department, B.K.S. Shantha pointed out that the IRD foregoes around Rs. 60 billion in potential revenue annually due to tax concessions extended to individuals earning less than Rs. 1.8 million per year.
The IRD stated that while the move is aimed at providing relief to individual taxpayers, it will result in a significant shortfall in government revenue.
He also stated that the IRD’s tax revenue target for the year 2025 is Rs. 2,195 billion. Despite the anticipated revenue loss due to the threshold adjustment, he stated that the IRD remains focused on meeting this ambitious target.
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