Sri Lankan Approve Numerous One-Off Levies

TaxOn October 20, 2015, Sri Lanka’s Government passed several amendments to implement tax proposals announced in the 2015 Interim Budget.

Under the change, a new 25 percent Super Gains Tax (SGT) will be imposed on companies and individuals whose book profits for the assessment year 2013/14 exceeds LKR2bn (USD14m), or where the book profits of all subsidiaries and holding companies of every company in a group of companies exceeds LKR2bn in the assessment year 2013/14. The SGT is a one-off tax and must be paid in three equal installments: October 31, 2015 (first installment); November 30, 2015 (second installment); and December 31, 2015 (third installment).

The amendment sets out new definitions of group of companies, holding company, and subsidiary (as opposed to the definitions contained in the Inland Revenue Act). It also clarifies that the taxes paid could be recognized as expenditure (after making the payment) in the financial statement of the company for the assessment year 2013/2014, but shall neither be allowed as expenditure for the purpose of taxation in a given assessment year, nor as tax credit against any tax liability except SGT.

Next, the amendment imposes a one-off LKR1bn Casino Industry Levy payable on or before November 15, 2015, by persons (including companies) engaged in a casino business as at January 29, 2015.

Subject to stipulated exceptions, a Motor Vehicle Importers Licence fee of LKR1.5m will be levied with effect from January 1, 2016, on import of motor vehicles for commercial use. Besides, all licensed mobile telecom operators will be required to pay, on or before November 15, 2015, a fee of LKR250m towards a Mobile Telephone Operator Levy.

The amendment also imposes a number of other fixed, one-off levies, including a Bars and Tavern Levy, of LKR250,000, payable on November 15, 2015; a Satellite Location Levy, for satellite operators; a Dedicated Sports Channel Levy; a Mansion Tax on new constructions from April 1, 2015, of LKR1m; and a Migrating Tax, of 20 percent of the foreign exchange funds taken out of the country, from November 1, 2015.

Finance Minister Ravi Karunanayake is due to announce the country’s 2016 Budget on November 20, 2015. Speaking at a pre-budget meeting with business representatives in Colombo on October 23, he promised a revolutionary Budget, which will provide increased opportunities for the private sector to compete in previously blocked industries with public sector organizations. (Tax News)

Leave a Reply

Your email address will not be published. Required fields are marked *

*


*

* Copy This Password *

* Type Or Paste Password Here *

164,750 Spam Comments Blocked so far by Spam Free Wordpress

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>