• Rs. 77.71 m tax default
• 3 weeks to settle or face legal action

The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) is preparing to issue a notice to a prominent private telecom company, notifying it of its intention to initiate legal proceedings to recover Rs. 77.71 million in unpaid telecommunication taxes, The Sunday Morning learns.

This amount, which includes taxes collected from three private companies under the telecom giant, had been written off by the company as bad debts. 

Once the notice is issued, the company will have three weeks to settle the outstanding amount before the TRCSL takes legal action.

In response to last week’s lead news article in The Sunday Morning titled ‘Telecom giant writes off millions in taxes?’ TRCSL Director General, Air Vice Marshal (Retd) Bandula Herath clarified that the commission had not written off any amount. 

Instead, the TRCSL has sought the assistance of the Attorney General’s (AG) Department to draft the notice.

“We are working to get the default amount. We have not written off any sum. On 8 October 2024, the AG’s opinion was sought by the TRCSL, and on 11 December 2024, the AG responded, confirming that this amount should be paid. The TRCSL wrote to the AG on 5 February, requesting the preparation of the notice. The first step in legal action is the notice. The TRCSL has not set off any amount,” he said.

Explaining why the unpaid amount had not been included in the 2023 financial sheets, a senior official from the TRCSL’s Finance Division stated that there had been a dispute over the amount. The telecom operator had written it off as bad debts and argued that the TRCSL should set off the amount.

“We wrote to the Finance Ministry for clarification. In the meantime, we did not include it in the financial sheets as there was no clearance from the ministry on whether the amount should be considered as receivable. After receiving clearance from the AG, who confirmed that the amount was indeed a receivable, we included it in the financial sheets of 2024,” the official explained.

The National Audit Office (NAO) recently criticised the telecom company’s decision to classify the unpaid taxes as bad debts, urging the TRCSL to take immediate steps to recover the outstanding taxes.

The Rs. 77.71 million defaulted sum comprises taxes collected from three private companies under the prominent telecom company, broken down into Rs. 35.77 million, Rs. 30 million, and Rs. 11.93 million.