Ravi K justifies cash withdrawal tax

Ravi Karunanayake

Finance Minister Ravi Karunanayake said today the budget proposal to impose a levy on cash withdrawals was meant to encourage the use of bank drafts and cheques for the transferring of cash.

The government in its 2016 Budget proposed that a levy be imposed on cash withdrawals of Rs.1 million and above. According to the proposal, a 2 percent levy would be imposed on cash withdrawals between Rs.1 million and Rs.10 million while 3 percent would be levied on cash withdrawals exceeding Rs.10 million.

“This proposal is meant to encourage the use of bank drafts and cheques instead of cash withdrawals of Rs.1 million and above,” the minister said.

Another budget proposal is to transfer all funds lying in dormant bank accounts to the Consolidated Fund, by January 1, 2016.

The Finance Minister said the money would be held in the consolidated fund as long as the accounts are inactive and the Central Bank would release the funds when a customer wished to reactivate the account. “This is not a means of confiscating the funds,” he said.

(Daily Mirror)

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