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Tax Implications on mobile phone bills in Sri Lanka by

Tax Implications on mobile phone bills in Sri Lanka
Tax on mobile bills



Tax Charged
Before 01/01/2011Change (%)After 01/01/2011
Mobile Bill ( Assume Rs 100 monthly)N/A100.00N/AN/A100.00
Environmental Conservation Levy(ECL)2.02.00(2.0)0.00.00
Nation Building Tax (NBT) 3.03.52(3.52)0.00.00
Mobile Subscriber Levy (MSL)10.011.72(11.72)0.00.00
Value Added Tax (VAT) 12.0(14.07)
Cess Fees (CESS)
Telecom Levy (TEL)0.00.0020.4120.020.41
Total TaxN/A31.31(8.86)N/A22.45
Total Monthly BillN/A131.31N/AN/A122.45
Effective Tax Rate31.31N/A(8.86)22.45N/A

Effect on Private Users
The total tax bill ( Based on Rs 100 bill) has come down by 8.86% from Rs 131.31 to Rs 122.45. As a result, private customers are better off.

Effect on Business Users
If you were a business user, who has been registered for VAT with the department of Inland Revenue for claiming the input VAT, you would have claimed input VAT of Rs. 14.07 before 1st Jan 2011 giving an effective reduced business outgoing of 117.24. However, after 1st Jan 2011, there is no VAT element included in the telecom levy and therefore, there is no input element of VAT that can be claimed by businesses. As a result, the total business outgoing is now Rs 122.45, which is a 4.44% increase from the previous total of Rs.117.24. Overall, this new levy/tax has adversely affected the business users.

Also read the tax implications on Broadband, Fixed LinesMobiles and Calling Cards

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