Telecom tax rises to 25%, but broadband levy remains at 10%

In the government’s 2014 budget, Sri Lanka has raised its general telecoms operator tax from 20% to 25%, although a lower tax rate of 10% on the provision of broadband internet services will remain at the same level, according to the budget announcement reported by Lanka Business Online. TeleGeography’s GlobalComms Database notes that various taxes payable by Sri Lankan telecoms operators were amalgamated in January 2011 when the government imposed the Telecommunications Levy of 20% of operator revenues, to replace a 27% collective taxation broken down as: 12% VAT, 10% mobile & fixed subscribers levy (MSL), 3% nation building tax (NBT) and 2% environment conservation levy (ECL). However, the 2014 budget announcement appears to mean that the rate of taxation is creeping upwards again to its previous level. GlobalComms adds that a year ago the Finance Ministry halved the specific tax on broadband services to 10% in its 2013 budget to support internet development.