TAXES

 Taxes are mandatory contributions levied on

individuals or corporations by a government entity
whether local, regional or national.
 It has two parts.

 Current Tax
 Deferred tax
Current Tax
 Current income tax assets and liabilities for the current and prior periods are
measured at the amount expected to be recovered from or paid to the Commissioner
General of Inland Revenue.
Calculate the Current Income Tax Charge in
HEMAS Group
Group Company
2022 2021 2022 2021
(LKR’000) (LKR’000) (LKR’000) (LKR’000)
Standard rates 1,342,981 903,285 12,813 28,080
Concessionary rates 445,500 578,944 307,891 0
1,788,481 1,482,229 320,704 28,080
Deferred Tax
Deferred tax is provided, using the liability method, on all temporary
differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Group Deferred tax assets Deferred tax liabilities

2022 2021 2022 2021

(LKR’000) (LKR’000) (LKR’000) (LKR’000)
Balance at the beginning of the year 144,281 164,426 1,363,032 1,733,238
Recognised through profit & loss 48,135 (13,005) 48,430 (35,647)
Income/(Expense) arising from discontinued 0 (7,962) 0 0
operation
Recognised through other comprehensive income (42,714) 1,512 312,498 (20,339)

Transfer (1,494) 1,006 (1,494) 1,512

Recognised through changes in equity 9,923 (1,696) 1,061 0

Disposal of subsidiaries (72,510) 0 0 (315,732)

Balance in the end of the year 85,621 144,281 1,723,527 1,363,032
Deferred Tax Assets & Liabilities
Company Deferred tax liabilities
2022 (LKR’000) 2021 (LKR’000)
Balance at the beginning of the year 119,426 138,528
Recognised through profit & loss 28,154 (13,650)
Recognised through other comprehensive income 383 (5,452)
Balance in the end of the year 147,963 119,426

The closing Deferred tax liability /(asset) balance relate to the following
Group (LKR’000) Company (LKR’000)
2022 2021 2022 2021
Revaluation of land & building to fair value 1,466,129 1,140,943 0 0
Revaluation of investment properties to fair value 81,787 47,142 167,342 141,722
Accelerated depreciation for tax purposes 505,245 420,118 (1,528) 5,186
Employee benefit liability (217,215) (215,258) (15,961) (18,721)
Losses available for offset against future taxable income (81,594) (16,327) 0 0
Net impact from right-of-use asset & lease liability (11,302) (13,756) (317) 0
Others (105,144) (144,111) (1,573) (8,761)
1,637,906 1,218,751 147,963 119,426
Exemptions/Concessions granted under the Board of
Investment Law
Exemption/
Company/Sector Nature Period
Concession
Profit of the company is exempt from income tax
Hemas Hospital (Pvt)
for a period of 5 years , at 10% for next 2 years & 20% Open-ended
Ltd
20% thereafter
Exempt from income tax for a period of 3 years , at
Hemas COE (Pvt) Ltd 10% for the next 2 years and 20% thereafter 20% Open-ended

For manufacturing and /or marketing of soap,

personal care items and other fast moving consumer
goods at its relocated factory in Dankotuwa under
Hemas Manufacturing ‘300 Enterprises Programme’. Inland revenue act 20% Open-ended
(Pvt) Ltd shall not apply for a period of 5 years. After the
exemption, the profits are taxed at 10% for a period
of 2 years and 20% thereafter
Exemptions/Concessions Granted Under the Inland
Revenue Act
Company/Sector Nature Exemption/ Period
Concession
Hemas Capital Hospital Entitled for a tax exemption period of 9 years Exempt 9 years ending
(Pvt) Ltd 2023/2024
Manufacturing Sector On gains and profits from manufacturing 18% Open-ended
Health care sector Health care service 14% Open-ended

Applicable Tax rates of Foreign Subsidiaries

Company Applicable Tax Law Tax rate
Hemas consumer brands (pvt) ltd Income tax ordinance of 1984 30.0%
Hemas consumer products (pvt) ltd Income tax ordinance 2001 (IT-2) 30.0%
Hemas consumer brands India (pvt) ltd Income tax act India 25.0%
Kyannmar pharmaceutical (pvt) ltd Income tax act Singapore 17.0%
Hemas mandalar pharmaceutical limited Myanmar income tax law 25.0%