• Deputy Minister confirms disparities in tax, licence terms
• Changes will take time amidst plan for study of telecom levies 
• Dialog warns of unfair advantage, calls for equal treatment
• Starlink currently operates under frequency licence only

The Government intends to consider rectifying the existing disparity between Starlink and other local telecom operators with respect to licensing requirements and taxation.

Speaking to The Sunday Morning Business, Deputy Minister of Digital Economy Eng. Eranga Weeraratne admitted to the veracity of speculation concerning the alleged disparity between the licensing requirements imposed by the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) and the taxes levied on Elon Musk’s Starlink – the satellite division of SpaceX – and those imposed on other local telecom operators.

“Yes, there is some kind of a disparity in the taxes and other licensing requirements for Starlink and other local operators,” he stated.

He stated that this disparity was something that the Government would look at correcting in time. However, Weeraratne noted that this would not happen overnight and would require proper study.

“The taxes for local operators vary for different services, like SMS and data. Therefore, we cannot suddenly introduce a new tax on data alone, because it will affect local data facilities as well,” he noted. 

Therefore, while admitting that measures would need to be taken in the future to address this disparity, he said that no concrete steps had been formulated yet.

“We are currently looking at what we can do in the future. There is nothing concrete to comment on at this moment,” he stated. 

In a letter dated 24 June 2024 addressed to the Director General of the TRCSL, Dialog complained that Starlink was permitted to operate solely under a frequency licence, without being required to obtain a system licence as in the case of other operators such as Dialog and Sri Lanka Telecom (SLT). 

Dialog pointed out that Starlink, in essence, would be functioning as a broadband service provider, similar to Dialog and SLT, the only distinction being that its broadband services would be delivered via satellite.

It further stated: “Existing service providers contribute directly and indirectly to the Government’s revenues via taxes such as CESS and corporate taxes, and also consumer taxes such as VAT, SSCL, and Telecommunication Levy. Considering the same, Starlink should be required to collect direct and indirect taxes as per laws of Sri Lanka and pay fees for the receipt of the intended frequency licence and contribute to the Sri Lankan economy in a similar manner as depicted above.”