Double Taxation Whammy From Good Governance Government
Chirantha Amerasinghe
In a world that is signing economic agreements against double taxation and the very thought of it is a human rights violation; here we are again shamefully saying that the citizens of Sri Lanka are subjected to a double taxation. We have to accept that any government requires a healthy tax policy to maintain a stable economy, so one cannot say people should not be taxed. However any policy should be healthy and should not harass the people, if it does it would be the demise of any government as history recalls. Lord Buddha said that “Authorities must take taxes in the matter of which a Bee takes pollen from a flower without harming it”. Coincidentally, my great great grandfathers brother, Veerapuranappu who is a national hero, stood up against such taxes and led rebellion against the English government as Viscount Torrington the then Governor of Sri Lanka imposed excessive taxes and burdened the people.
From the 2nd of May 2016 the taxes on telecommunication services were double taxed by VAT and NBT. As a result the tax on telephone charges which was at 27.55% rose to 49.73% which is an increase of 80%. Also the tax on internet charges which was at 12.24% rose to 31.77% thus an increase of 159%. Currently the effective rate of VAT on the above taxes is 19.53% which is 4.53% higher than what is said in parliament due to a effective rate policy. This cannot be a policy of “Good Governance” either.
The background story lies behind the reintroduction of the VAT and NBT to the Telecommunications Sector through the budget which took effect from 2nd of May. The current government accused the former government of removing VAT and NBT from the Telecommunications Sector to make a political gain in a Parliament full of old and out dated people who cannot even listen or remember these actions and are not even bothered to do so. In reality the former government did not remove VAT and NBT from Telecommunication Services but rather combined the two into the Telecommunications Levy which today stands at 26.04%.
