"The proposals are positive for sectors across the board with reduced taxes likely to drive the overall economic activity and the broader consumer sentiment.
Whilst the proposals are yet to be gazetted, we expect the stock market to react positively from 28 Nov 2019," CT CLSA said.
Sri Lanka’s government headed by newly elected president Gotabaya Rajapaksa announced the tax cuts after the first meeting of its cabinet of ministers.
Accordingly, it was announced that the administration would do away with National building tax (NBT) on household goods, Withholding tax (WHT) on interest and debt tax, PAYE tax, government taxes imposed on religious places, with immediate effect.
The cabinet also decided to reduce Value Added Tax (VAT) from 15% to 8% and to increase the tax-free threshold for VAT from LKR 1 Mn per month to LKR 25 Mn per month.
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