Sri Lanka’s WHT Regime: Key Pivots in IRA Bill 2026 📈

The proposed Inland Revenue (Amendment) Bill of 2026 marks a significant shift toward digitizing and formalizing Sri Lanka's tax landscape, specifically targeting the gig economy and investment returns. • Employment & Personal Tax Individual taxpayers with employment income subject to APIT are exempt from filing returns if their annual interest income is below Rs. 5,000 (eff. April 2025). However, providing a TIN is now mandatory for APIT statements; missing records will result in rejected tax credits. • Investment & AIT Changes Residents can now avoid mandatory withholding on interest by providing a self-declaration to banks confirming they have no taxable income. Note: Fraudulent declarations now carry a penalty of up to Rs. 200,000. • Expanded Service Fees (5% WHT) The "withholding universe" has expanded to include a broad range of independent service providers earning over Rs. 100,000/month. New categories include: • Digital & Creative: Social media specialists, brand ambassadors, IT specialists, videographers, and artists. • Professional Services: Auditors, valuers, advisors, translators, and debt collectors. • Personal Services: Personal trainers, coaches, beauticians, and therapists. • Administrative Compliance Withholding agents must now issue tax certificates free of charge. This structured pathway aims to integrate the ICT/BPM and gig sectors into the formal economy, enhancing the IRD's cross-verification capabilities.