Sri Lanka, May 20 -- The Cabinet has approved a proposal to provide relief to low-income individuals affected by the recent increase in the withholding tax rate from 5% to 10%, introduced under the Inland Revenue (Amendment) Act No. 2 of 2025, effective from April 1, 2025.

The revision has led to witholding tax being charged even on individuals earning less than Rs. 1.8 million annually-the threshold for tax liability-causing financial hardship for low-income earners and small-scale depositors.

As a remedy, President Anura Kumara Dissanayake in his capacity as Minister of Finance, Policy Planning and Economic Development, proposed the introduction of a self-declaration mechanism. This will allow individuals earning below the tax-free t...