Tele Tax

Nov 07, 2008 (LBO) – Sri Lanka has made a new 10 percent telephone tax technology neutral by extending it from mobile phones to fixed lines as a part of proposals to raise revenue in 2009. The think tank strongly opposed an original state proposal to charge a fixed levy on mobile phones.

LirneAsia chief Rohan Samarajiva pointed out that the fixed tax hurt the bottom-of-the pyramid or the poorest customers most.

The then telecom minister Rauf Hakeem then changed it to a turnover based tax.

Meanwhile the government cut valued added tax from 15 percent to 12 percent. "The telephone levy of 10 percent presently applicable to mobile and codeless (sic) telephones will be expanded to be applicable to fixed line telephones as well," the budget speech released to the media said.

"However, fixed line telephones used by any surviving spouse of service personnel killed in action and disabled soldiers will also be exempt from this tax."

In the past few years Sri Lanka's government has pushed inflation up to above 20 percent through money printing to make up for revenue shortfalls making lives of all pensioners extremely difficult.

The new budget contained a plethora of