Sweeping changes to come through proposed amendments to Finance Act

Friday, 17 August 2018 00:10 - - {{hitsCtrl.values.hits}}

Amendments to introduce host of new levies including Telecom Tower Levy, Debt Repayment Levy, Luxury Tax and Vehicle Entitlement Levy

By Chathuri Dissanayake

A number of changes proposed to the Finance Act will impose new levies to several sectors including telecommunications, vehicle importation and tourism.

The amendment bill outlines a number of changes to taxes and levies currently in operation while introducing new ones. The amendments gazetted on 10 August, subject to approval by Parliament, propose a new levy called the Annual Company Registration Levy on companies registered under the Companies Act No. 7 of 2007. The Bill also proposes 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 compared to the previously proposed Rs. 200,000 per month charge. The amendment also proposes a levy on Short Message Services, charging 0.25 per SMS for all bulk advertising messages, payable by the advertiser. The Bill also proposes a 7 % levy on Value Added Tax (VAT) base termed a Debt Repayment Levy (DRL) to be charged from every financial institution on the value addition attributable to the supply of financial services by each institution.

The Bill also outlines the details of a new levy called Carbon Tax from the registered owner of motor vehicles which fall under the categories of hybrid, fuel or passenger bus as specified in the schedules.

Further, the Bill also provides for the imposition of a Luxury Tax on motor vehicles with cylinder capacity exceeding 2,300 cc in diesel or 1,800cc in petrol or electric power engines that exceed 200 KW, excluding dual purpose petrol vehicles with 2,200cc capacity or electric motor vehicles.

If ratified by Parliament, the amendments will also introduce a Vehicle Entitlement Levy for a select number of vehicles specified in the Bill.