Telcos pass on tax benefit to customers

Sri Lanka’s telecommunication service providers have fallen in line with the Telecommunication Regulatory Commission of Sri Lanka’s (TRCSL) recent announcement to reduce the Telecommunication Levy (TL) by 25% as advised by the Government.
Accordingly, the TL which was being charged at 15% for telecommunication services prior to 1 December has now been reduced to 11.25%. The announcement comes following the Government’s recent tax concessions which include a 25% reduction in the TL with effect from 1 December.
The Sunday Morning Business reliably learns that the telecommunication service providers were waiting for an official directive from the TRCSL, which is the national regulatory agency for telecommunications in Sri Lanka.
Speaking to The Sunday Morning Business, an official from TRCSL noted that the directive reached service providers on 3 December, making the tax concession retrospectively effective from 1 December.
“We have advised the telecommunication providers to pass down this concession to the customers. This is a direct tax, so there will be a reduction only in the TL customers pay, not in the rates,” the official noted.
The Sunday Morning Business spoke to Mobitel CEO Nalin Perera, who said he welcomed the move by the Government and confirmed that Mobitel has passed it onto their customers with effect from 1 December.
Meanwhile, Hutch CEO Thirukumar Nadarasa told us that Hutch would straight away adhere to all directives from TRCSL. However, he added that Hutch could not make it effective from 1 December due to a system upgrade at the company.
“We were able to do it only from 3 December,” Nadarasa noted.
All attempts to reach Dialog Axiata for comment proved futile.
The TL was imposed under the Telecommunication Levy Act No. 21 of 2011 from 1 January 2011 at the rate of 20% on the value of the telecommunication services supplied by the operator.

The levy was increased to 25% with effect from 1 January 2014 and was reduced to 15% with effect from 10 November 2018. After a little over a year, it has now been reduced to 11.25%.