📈 Ceylon Chamber Urges Balanced Reforms in 2026 Tax Bill

The Ceylon Chamber of Commerce (CCC) has submitted comprehensive recommendations to the Ministry of Finance regarding the Inland Revenue (Amendment) Bill of 2026, emphasizing the need for a tax framework that supports business continuity and investment. • Thin Capitalisation Rules: The Chamber advocates for excluding negative reserves from gearing calculations to prevent excessive tax burdens on financially distressed firms. It also calls for the full allowability of finance costs on all genuine commercial borrowings. • Compliance & Penalties: Proposed 6-to-9 month timelines for submitting evidence are deemed too rigid. The CCC suggests more flexibility and argues against stringent penalties, including imprisonment, for minor compliance lapses to safeguard investor confidence. • Insurance Sector: Recommendations include deferring amendments to Section 67 pending further industry consultation. Key concerns involve the taxation of policyholder distributions and clarity surrounding IFRS 17 implementation. • Regulatory Powers: The CCC highlighted that the discretionary powers of the Commissioner General must be clearly defined and transparent to avoid economic uncertainty. The Chamber continues to engage with policymakers to ensure the bill is amended during the Committee Stage, aiming for a stable environment to attract private investment and support national recovery. 🇱🇰