TAX HISTORY

HISTORY OF TAXATION IN SRI LANKA

1932 – Income Tax Department was established

 

1932 – Income tax (1)* was first introduced

 

1932 – Mr. N. J. Huxham was appointed as the first Commissioner to administer tax

 

1933 – Renamed the department as “Department of Income Tax , Estate Duty and Stamps”

 

1941 – Excess Profits Duty (2*) introduced

 

1948 – Profit Tax introduced instead of Excess Profits Duty introduced

 

1950 – First Double Tax agreement signed with U. K.

 

1958 – Named the Department as “Department of Inland Revenue”, Introduced Capital gain (3*) , Wealth Tax (4*) , Expenditure Tax (5*) , Gifts Tax (6*)

 

1961 – Introduced of Surcharge on Income Tax (7*) National Development Tax (8*) Rice subsidiary Tax (9*) Surtax, a tax on registration of Business and Professionals (10*), Sales Tax (11*)

 

1963 – Established first Region office at Jaffna, Introduced Business Turnover Tax (12*)

 

1964 – First Tax Amnesty

 

1971 – Introduced Compulsory Saving Levy (13*), PAYE Scheme (14*), Capital Levy (15*)

 

1972 – Self Assessment Scheme introduced

 

1974 – The Department of Inland Revenue restructured, Inland Revenue Service was established

 

1979 – Current year basis taxation introduced

 

1983 – Introduced Rehabilitation Levy (16*)

 

1985 – Abolished Estate Duty & Gifts Tax

 

1986 – Introduced WHT on Interest (17*)

 

1988 – Introduced Betting and Gaming Levy (18*), Implemented “Imputation System” of Company Tax

 

1991 – Devolution of Turnover Tax to Provincial Councils

 

1992 – Introduced WHT on Specified Fee (19*) Defence Levy (20*)

 

1998 – Introduced Goods and Service Tax (GST) (21*) instead of Turnover Tax

 

2000 – Inland Revenue Act No. 38 of 2000

 

2002 – Introduced Value Added Tax (VAT) and Debits Tax (22*), Abolished GST, Defence Levy (NSL), Stamp Duty

 

2004 – Introduced Economic Service Charge (23*)

 

2005 – Introduced Social Responsibility Levy (24*) and Share Transaction Levy (25*)

 

2009 – Introduced Nation Building Tax (NBT)

 
 

* Types of taxes in Sri Lanka