The Hon. Wasantha Samarasinghe

¶ 01 Hon. Member, the vendors selling feed too must be in the VAT net; where inputs are purchased from VAT-registered suppliers, the producers can claim input VAT. The broader problem is widespread non-compliance — large traders not paying VAT. We have allocated about Rs. 1,400 billion this year for education, health, highways and infrastructure; VAT must be collected along the chain. Small producers below the thresholds are exempt. There was even a time eggs fell to Rs. 17 due to a one-million daily surplus of production over consumption; structural issues exist, but some are trying to use this moment to crush small producers. We will reduce costs and protect them. VAT refunds occur when you buy from VAT payers.

¶ 02 On Withholding Tax (WHT): we have exempted monthly interest income up to Rs. 150,000 from WHT; previously Rs. 5,000 (5%) was deducted even at lower levels. Now, banks, cooperative banks and other financial institutions must deduct WHT only when monthly interest exceeds Rs. 150,000 (i.e., Rs. 1.8 million annually). At current interest rates of 8-9%, only those with fixed deposits above roughly Rs. 2 million face WHT. Earlier even EPF-derived small deposits and pensions faced 5% WHT — we have removed that burden. Depositors below the threshold may submit the declaration form to their bank (also available on the IRD website) to be exempt.

¶ 03 We did set the WHT rate at 10% — but only for higher interest earners. Some have fixed deposits generating tens of millions in annual interest via funds; they can pay 10% — that revenue funds education, health, roads and relief. Through these tax reforms we strengthen industry, deliver relief to the people, and regularize the system. Thank you.