The SL Government and the IMF have reached an agreement to amend the pay-as-you-earn (PAYE) tax structure, President Ranil Wickremesinghe said at a Presidential election rally in Eheliyagoda.

The proposals from both parties are being considered, and the specific details will be released soon, according to the President.

This announcement follows a statement made by President Wickremesinghe two weeks ago, where he hinted at upcoming relief measures for personal income taxpayers.

The government had proposed adjustments to the personal income tax slabs, increasing the threshold from Rs. 500,000 to Rs. 720,000 to provide relief to mid-level taxpayers affected by recent tax reforms.

The IMF, in response, suggested offering more relief to lower-income bands while maintaining similar relief for mid-level taxpayers and slightly less for higher earners.

The President emphasised that the government and the IMF were evaluating two proposals.

The Treasury’s proposal includes maintaining a tax-free threshold of Rs. 1.2 million, expanding the tax band from Rs. 500,000 to Rs. 720,000, and keeping the top tax rate at 36%.

Meanwhile, the IMF’s counter-proposal suggests maintaining the tax-free threshold at Rs. 1.2 million but widening the first tax band from Rs. 500,000 to Rs. 1 million, with all subsequent bands shifting up by Rs. 500,000.