Sri Lanka: Technical Assistance Report-Property Taxation at the National and Subnational Level

August 23, 2024

Preview Citation

Format: Chicago

Sri Lanka: Technical Assistance Report-Property Taxation at the National and Subnational Level, (USA: International Monetary Fund, 2024) accessed November 12, 2024

Summary

This report analyzes Sri Lanka’s options for improving the fairness and progressivity of the tax system through the introduction of a nationwide property tax. Given constitutional constraints that limit the taxation of property at the central government level, it recommends taxing the imputed rental value of owner-occupied housing. With a suitable exemption threshold and a progressive tax rate structure, such a tax can support fiscal consolidation by raising revenue from the most affluent members of Sri Lanka’s society while introducing little distortions. Implementation and enforcement of the tax will require substantive investments in data infrastructure, including through the introduction of a digital sales price and rents register. The report also outlines options for improving the fairness and revenue productivity of subnational assessment rates (local property taxes) and suggests additional reforms that can complement the taxation of real property at the national and subnational level.

Subject: Income, Income and capital gains taxes, National accounts, Property tax, Revenue administration, Taxes, Transaction tax

Keywords: Australia and New Zealand, Central government, Fiscal consolidation., Global, Imputed rental income, Imputed rental income tax, Income, Income and capital gains taxes, Market rental value, Property tax, Property taxation, Rental contract, Roll number, Simplified assessment approach, Sri Lanka, Transaction tax

Publication Details

Pages:

53
Volume:

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DOI:

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Issue:

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Series:

Technical Assistance Report No. 2024/074
Stock No:

TAREA2024074
ISBN:

9798400286803
ISSN:

3005-4575

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