Minister Ravi Karunanayake’s Budget of 2015 gave a certain amount of relief to the hard-pressed middle class.
One of the most welcome was the extension of the tax-free fixed deposit amount from one million rupees to one and half million for senior citizens. The previous government had made it one million. Senior citizens, most of whom live on pensions and savings, welcomed this.
But two months later the banks are yet to implement this relief provided by the minister.
The minister also removed the withholding tax on interest earned on fixed deposits. This tax was most unjust because it was charged even from the poorest. But the banks still impose the withholding tax on interest earned despite the budget proposal.
Finally, in the Budget the minister removed the tax on credit card payments. This is very good because we must encourage more use of credit cards so that we can move on to the cashless state of development. For the middle class it is useful to make their purchases in the present and make payment a month later.
But I understand that the tax on credit card payments when used overseas has been increased from 1.5 to 3%. For the middle class traveller going to India or Thailand with difficulty this is a most unfair burden. They travel with great difficulty, having just one meal, staying in a budget hotel, buying just a few cheap souvenirs and now they have to pay a big tax for that. The rich traveller will not feel it. It is the middle class which will suffer on account of this high increase of a tax.
Honourable Minister please review these matters and give relief to the salary-earning middle class of Sri Lanka.