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05 November, 2015 08:16 AM Source: Financial Times - Sri Lanka
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Widely criticised by the private sector but justified by the ‘Yahapalana’ Government, the one-off Super Gains Tax (SGT) is expected to bring in much higher revenue, Finance Minister Ravi Karunanayake revealed yesterday.
“We originally estimated Rs. 50 billion from the one-time Super Gains Tax but we are likely to get around Rs. 65 billion,” Karunanayake told a group of editors yesterday at his Ministry.
He said 22 companies had paid the first instalment of SGT which was due by 30 October.
SGT rate is 25% on the taxable income for 2013/14 for any individual or each company including subsidiaries and holding company (including subsidiaries and holding company in a group of companies notwithstanding that the profit before income tax of any such company in the group does not exceed Rs. 2 billion.
 The second instalment is due on 30 November and the final portion is on or before 31 December.
Banks have been offered the option of lending to the Government at 6% interest in lieu of the SGT component.
In a meeting to outline the broader objectives of the upcoming Budget, the Finance Minister told editors that extra revenue via new taxes such as SGT was necessary to finance the relief package announced in the 100-Dayprogram of the Yahapalana Government.
He said the cost of most of the relief and stimulus package under the 100-day program was Rs. 220billion. Of this Rs. 120 billion was to be financed via new one-off taxes, the Mansion Tax and other measures. The balance was met by saving Rs. 90 billion expenditure as part of better fiscal prudence.   Untitled-2
The Finance Minister also said that Prime Minister Ranil Wickremesinghe would today (5 November) in Parliament outline the broader future direction of the Government as well as the policy framework.
“The 2016 Budget to be presented on 20 November will be revolutionary and sensational,”Karunanayake said.
Without revealing specific proposals, he said that in terms of taxation, the rich who evade will be compelled to pay taxes whilst those who are compliant will not be burdened. According to the Minister, 60% of the affluent class are not paying taxes. 

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