Amendments to Finance bill 2018 approved by Cabinet

Thursday, 20 September 2018 02:27 - - {{hitsCtrl.values.hits}}

The Cabinet has approved a host of Amendments, including abolition of Mansion Tax, to the Finance bill2018 approved by the Cabinetin July this year to incorporate tax proposals in the last three years.

The Amendments will be incorporated to the bill at the committee stage of the debate, Cabinet Co-Spokesperson Gayantha Karunathilaka said yesterday.

Presenting the Cabinet paper, Finance Minister Mangala Samaraweera proposed to abolish the Mansion Tax proposed in the 2015 Budget,citing practical difficulties in charging the tax.

The Annual Company Registration Levy will now be limited as per the 2016 Budget proposal. The proposal to broaden the tax base included in the Finance bill 2018has been amended to promote start-ups and entrepreneurship, the Finance Minister informed the Cabinet.

The Finance bill 2018 gazetted on 10 August, subject to approval by Parliament, proposed a new levy called the Annual Company Registration Levy on companies registered under the Companies Act No. 7 of 2007, where a private company is charged Rs. 30,000, a listed public company Rs. 1,500,000, and any other company Rs. 250,000, payable every year at the time of filing its annual returns.

The Finance Minister also proposed enforcing the Debt Repayment Levy with effect from 1 October 2018 to December 2021, while all other provisions are to be effective from 1 January 2019.

The proposal made by the bill to impose a levy of Rs. 200,000 per annum for each tower from 1 January 2019 on all mobile telephone operators who own cellular towers has now been extended to cover all telephone operators who use cellular towers. The move was made to ensure that no operator avoids paying the levy by transferring or avoiding ownership of the towers to third parties or by outsourcing, the Minister explained to the Cabinet of Ministers.

According to the proposed Amendments, all institutions not exceeding Rs. 12 million per annum, or Rs. 3 million per quarter, will be liable to pay 0.5% Tourism Development Levy (TDL), chargeable from 1 October.

The revenue collected from these institutions is to be remitted to the Consolidated Fund.

The Luxury Tax on motor vehicles should be made as an upfront payment, according to the proposedAmendments, which will be in lieu of the existing Luxury Tax and the Semi Luxury Tax currently payable in yearly instalments.

However, the current tax scheme will continue till 31December, and the Amendments will only come into effect at a future date deemed appropriate by the Finance Minister.