Telecommunication sector continues to be tax magnet

Telecommunication services were hit with a slew of taxes in the 2017 budget, with the government ironically discouraging the exchange of information on its way to building a knowledge-based economy.

Finance Minister Ravi Karunanayake increased the Telecommunications Levy charged on internet services to 25 percent, to bring it on par with other telecommunication service.
SIM card activations were also slapped with a charge.
“It has been observed that more than 150,000 SIM cards are sold monthly. I propose to charge a SIM Card Activation Levy (SCAL) of Rs. 200 per SIM to discourage the use of mobile connections temporarily for fraudulent and criminal activities,” Karunanayake said.
Further, spectrum fees were increased by 25 percent.

“Annual Spectrum License Fee (ASLF) has not been revised for a considerable period of time. Hence, I propose to increase the Annual Spectrum Licensee Fee by 25 percent, with effect from January 1, 2017,” Karunanayake added.

Sri Lanka’s mobile phone penetration is over 100 percent of the population, and the government this year already increased the taxes on the telecom industry from 25 percent to 43 percent, creating widespread anguish.

Meanwhile, Karunanayake went on to say that 175,000 students and 28,000 teachers at the GCE Advanced Level will be provided a free tablet, for which he requested telcos to provide Wi-Fi services.