| Type of Tax | Tax changes |
|---|---|
Personal Income Tax | Highest tax rate was decreased to 18% from 24%. Six band structure of 4,8,12,16,20 and 24 percent was replaced with 6,12,18 three band structure. Income tax exemptions were granted to profit or income generated through agriculture, Information Technology (IT) and enabling services and few other sources. |
Corporate Income Tax | Standard tax rate was reduced from 28% to 24% |
Income tax rate applicable for manufacturing industry was reduced to 18% from 28% | |
Pay As You Earn (PAYE) tax | The tax was abolished, and an Advanced Personal Income Tax scheme was introduced |
Withholding Tax (WHT) | Remove WHT on interest, rent and other services |
Economic Service Charge (ESC) | Abolished |
Value Added Tax (VAT) | VAT rate was reduced to 8% from 15% |
To increase the threshold for registration of VAT to Rs. 300 million per annum from Rs. 12
million per annum. | |
Ports and Airports Development Levy (PAL) | Standard rate was increased to 10% from 7.5% |