Friday, December 8, 2023

Govt. says no decision to halt PAYE tax collections from public sector employees

The government has not taken a decision to halt collection of Pay-As-You-Earn (PAYE) taxes on non-financial allowances of public employees despite requests from various public employees.
Divisional and District Secretariats have requested from the Inland Revenue Department (IRD) to temporarily halt PAYE tax collections on their non-financial allowances until a final decision is reached on the matter.
“As far as I’m aware, no official decision has been taken to halt PAYE tax collections,” State Minister of Finance Shehan Semasinghe told Mirror Business.
Meanwhile, Commissioner General of Inland Revenue Ranjith Hapuarachchi also shared that IRD plans to pursue collection of PAYE taxes in line with the instructions and guidelines issued to withholding tax agents.
“As far as we are concerned, we are ready to implement it. We have already published necessary instructions,” he said.
Following a discussion held last week, District Secretaries have requested the Minister of Finance and the Treasury Secretary to exclude taxes on non-financial allowances pointing out the disadvantageous position they would be in. Until a decision is reached on the matter, they have requested their respective withholding agents to exclude PAYE on non-financial allowances.
Meanwhile, the Attorney General (AG) has requested the Court of Appeal to provide an opportunity to present facts before the court in terms of the interim order issued preventing the IRD from collecting PAYE taxes from judges. The case is scheduled to be taken up on February 9th.
The Court of Appeal on Wednesday issued an interim order preventing the IRD from collecting PAYE taxes from judges after considering a petition filed by an association of District Judges and Magistrates.

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