Proposed tax on EPF, ETF ICEU seeks urgent meeting with Minister

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By 2017-08-19

By Niranjala Ariyawansha

The Inter-Company Employees' Union (ICEU) has requested an urgent discussion with Minister of Finance Mangala Samaraweera regarding the proposal to charge taxes from the Employees' Provident Fund (EPF) and Employees' Trust Fund (ETF) through a new Inland Revenue Department Bill.

President of the ICEU Wasantha Samarasinghe told Ceylon Today yesterday that a letter was sent to Minister Samaraweera yesterday requesting an opportunity for a discussion in this regard.

He emphasized that if an attempt is made to adopt such a Bill which has been prepared unreasonably, without giving an opportunity for relevant discussions a massive struggle will be launched against it.

The proposed Bill was submitted to Parliament last month by the Minister of Finance in order to increase the collection of taxes.

"It has been proposed through this Bill to charge taxes from the EPF and ETF. No discussion has ever been held before to tax the EPF and ETF which belongs to employees of the private sector who do not get pensions. Up to now there was only a nominal tax of 10 per cent in existence. The Minister of Finance has proposed through the new Act, to charge 14 per cent tax on the annual investment income of these funds and another 14 per cent as withholding tax. This is completely unjustified," Samarasinghe explained.

EPF and ETF contain funds that private and semi-government sector employees save subsequent to paying taxes.

The Inland Revenue Department as well as employees of the private sector have already expressed strong objections to this new Act.

Expressing their opposition, they have said that, the new Act is a requirement of the International Monetary Fund (IMF) and that it does not fulfill a local requirement.

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