Service Charge

The Inland Revenue says a new tax – the Economic Service Charge (ESC) – will be enforced on companies from next week. The Inland Revenue says a new tax – the Economic Service Charge (ESC) – will be enforced on companies from next week. “We will advertise for companies to pay next week,” said Commissioner of Inland Revenue, R P L Weerasinghe.

All companies operating for three years, with a turnover of Rs 50mn and above, will come within the new tax net for a one percent payment on turnover.

The tax, although proposed in the previous budget, got Parliamentary approval only last week but is effective in retrospective from April 1st 2004.

However at a pre-budget workshop, organised by the National Chamber of Industries, on Thursday, a grace period was promised for companies to pay up.

“We know it is difficult to pay up two quarters at once so we will give a grace period for the payments once they are called,” said Weerasinghe.

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The ESC is looked at as an advanced income tax and can be set off against income tax payments for three years.

Although the original ESC tax intended targeting companie