Sri Lanka Revises NGO Tax Rule

A member of the Tamils Rehabilitation Organization, a non-governmental organization in Sri Lanka, helps people displaced by fighting in Vanni. The Sri Lankan government has issued a new regulation that will make NGOs eligible for tax remissions. Photo by: trokilinochchi / CC BY

The Sri Lankan government has issued a new regulation that will make non-governmental organizations eligible for tax remissions.

Prior to the new rule, which was issued July 22, NGOs in Sri Lanka may be taxed up to 30 percent of their “profits,” which the regulation defined as 3 percent of the money these groups received as grants and other forms of contributions.  

Now, NGOs may be freed of the tax liability if the country’s commissioner-general of inland revenue determines they are engaged in humanitarian activities. NGOs should also be providing and rehabilitating infrastructure facilities and livelihood support in areas identified by the said commissioner to be stricken by disasters, civilian conflicts or poverty.

The new guidance defines what the government considers as an NGO and activities that are humanitarian in nature.

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    Eliza Villarino

    Eliza Villarino currently manages one of today’s leading publications on humanitarian aid, global health and international development, the weekly GDB. At Devex, she has helped grow a global newsroom, with talented journalists from major development hubs such as Washington, D.C, London and Brussels. She regularly writes about innovations in global development.