25/05/2025
The Cabinet of Ministers has approved the proposal to initiate necessary amendments to the Inland Revenue Act No. 24 of 2017 in order to make it mandatory to furnish the Tax Identification Number (TIN) when opening all types of bank accounts.
Legal provisions to increase the withholding tax rate from 5% to 10% were introduced by the Inland Revenue (Amendment) Act No. 2 of 2025 with effect from April 1, 2025 due to charging advance income tax even from individuals with an income not exceeding Rs. 1.8 million which is the annual revenue limit to recover tax from. The measure was taken since depositors and low income earning individuals are apparently facing inconvenience.
As a solution to the issue, it has been proposed to introduce a methodology to present a self-declaration by the individuals with a lower income than the tax free margin.
Accordingly, the Cabinet of Ministers has granted approval to the proposal submitted by the President in his capacity as the Minister of Finance, Policy Planning and Economic Development to make necessary amendments to the Inland Revenue Act No. 24 of 2017 to introduce a self-declaration for all domestic depositors with an estimated revenue not exceeding Rs. 1.8 million per annum to release them from recovering withholding tax on interest and making compulsory of furnishing the Tax Identification Number (TIN) for opening all sorts of bank accounts.
