Government denies 5% tax on people earning over Rs. 100,000

The Government yesterday clarified that there was no decision to impose a 5% tax on people earning over Rs. 100,000 monthly, stating that the idea was a personal view of Trade Minister Bandula Gunawardena.

“Remarks by the Trade Minister are not the view of the Government nor the Cabinet. This was just a personal comment,” Co-Cabinet Spokesman and Mass Media Minister Dullas Alahapperuma said at the post-Cabinet meeting media briefing yesterday. Trade Minister Gunawardena this week suggested a 5% tax on people earning over Rs. 100,000 with a view to operate public services such as education and health amidst the COVID pandemic.

As per Gunawardena’s proposal the tax must be imposed as ‘Community Preservation and Contribution Fund’ for the benefit of the education and health services.

The Trade Minister also said that the tax must be introduced without changes to the salary limit and only on people earning a monthly income of over Rs. 100,000.

The idea drew flak from civil society and was highly criticised on social media on the basis that the Government was only charging 1% under the new tax amnesty on unscrupulous people hoarding black money whereas a high tax was being proposed on those who were legally earning a salary.

(Source: Daily FT – By Charumini de Silva)