Officials from the Ministry of Finance confirmed today that reports alleging the UNF government’s efforts to tax children’s savings accounts in an unfair manner are false.
They point out that a withholding tax of 5% will be imposed only if the interest income from savings exceeds Rs. 5000. A senior ministry official said that one should have at least Rs. 1.2 million to get an interest income of Rs. 5000. If one is making an interest income of Rs. 6000 for instance, that person will be only subject to the 5% withholding tax on the additional Rs.1000 as the tax-free limit is Rs. 5000, they added.
Furthermore, the official said that a vast majority of children’s savings accounts in the country do not fall under this category and that this would only affect the savings accounts of ‘child millionaires’.