Agonizing Wait

Apr.18 (LBO) – Sri Lankan banks have asked for extra time to implement a tax on credit card transactions, as the new stamp duty law is riddled with ambiguities. A stamp duty of one percent or Rs10 for every Rs1,000 spent, has kicked in from April 4, throwing banks and credit card users off balance since the tax was implemented with little industry consultation.

"There is an utter state of confusion now," says Upali de Silva, secretary general of the Sri Lanka Banks' Association told LBO on Tuesday.

"There are lots of gray areas like it only affects transactions over 25,000 rupees, which is not in the gazette," he said.

Inland Revenue Chief A A Wijepala told reporters recently that the stamp duty will apply to transactions over Rs25,000.

The wording in the law also gray, says Sriyan Cooray, Financial Controller of HSBC Bank, the island's largest credit card issuer.

"The law refers to credit balances," Cooray says. "For instance, if you have a 1000 rupee credit card bill and pay 200 rupees, you will be taxed for the 1000 rupees plus the 800 rupees that is being carried over to the next month, in addition to what you spend in the followin

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