The cabinet committee on economic management last week has agreed to reintroduce the Capital Gains Tax (CGT) to rectify the increase in the inequality of income distribution, the government said announcing the Cabinet Decisions on Wednesday. Accordingly, the proposal made by Prime Minister Ranil Wickremesinghe as the Chairman of the Cabinet Committee on Economic Affairs, to draft a new Capital Gains Tax Regime, was approved by the Cabinet of Ministers.
‘During the last few decades there has been a massive increase in the private capital in the country. The increase in the prices of land attributable to the large infrastructure developments carried out through government funds have enabled the land owners to make significant capital gains free of taxation. This resulted in the increase in the inequality of income distribution,”the government said.