Economic Charge — Budget 2004

A new tax called Economic Service Charge (ESC) of one percent over turnover or assets will come into effect next year, in an attempt to net in firms not paying government taxes.
ESC will be slapped as an advance collection on the final tax payable on companies, including BOI firms, with a turnover in excess of Rs 20 mn or assets in excess of Rs 10 mn.rn

rnFinance Minister Choksy says of the 32,000 companies registered in Sri Lanka only 9000 filed returns and 2215 actually paid income tax.rn

rnCompanies would be given a one-time chance to choose whether base is assets or turnover.rn

rnThe rule will also apply to BOI firms who are currently under tax holidays.rn

rnBut, Minister Choksy says tall firms benefit from the economic services and infrastructure provided by the government and should pay some form of tax to the government.rn

rnThe measure is expected to bring in Rs 300 mn.rn

rnIn addition to the economic service charge several measures were introduced in the budget to reduce revenue sl