Bold Fiscal Move: Government to Introduce Wealth and Inheritance Taxes in 2024

September 11, 2023

In a bold fiscal move, the Sri Lankan government has unveiled plans to implement both a wealth tax and an inheritance tax starting next year. These taxes are expected to reshape the country's tax landscape and generate significant revenue.

Wealth Tax: The wealth tax will primarily target individuals and families with a net worth exceeding a certain threshold, tentatively set at X million. This tax structure is progressive in nature, meaning that those with higher net worth will pay a larger share of their wealth in taxes. Proponents argue that it's a just way to redistribute wealth and address income inequality.

Inheritance Tax: The inheritance tax, on the other hand, will be levied on the total value of inherited assets. Unlike the wealth tax, it will apply at a flat rate, ensuring that all beneficiaries pay the same tax percentage, regardless of the size of their inheritance. Advocates of this tax contend that it promotes fairness and contributes to government revenue.

Controversial Measures: Both the wealth tax and inheritance tax have stirred controversy in Sri Lanka. Supporters assert that these taxes will play a crucial role in reducing income inequality and financing public services. However, opponents argue that they may discourage investment and hinder economic growth, claiming that they unfairly target the wealthy.