Sri Lanka business to pay one-off and retrospective taxes this year: Eran

ECONOMYNEXT – Sri Lankan firms hit by a retrospective and one-off taxes will have to pay the levies this year and Prime Minister Wickremesinghe has set out the future intentions in a speech to the parliament, Deputy Minister Eran Wickramaratne said.

Wickremesinghe told parliament Thursday that one-off and retrospective taxes will be ‘suspended’ using the Sinhala word ‘athhitoowanawar’ creating a confusion whether companies would not have to pay the balance due on the taxes.

"This is a statement setting out the future policy direction," Wickramaratne said.

Companies will have to pay the taxes till December, he said.

Even earlier Finance Minister Ravi Karunanayake had said that the taxes would not be re-imposed.

The administration is expecting to collect over 60 billion rupees from the tax, but the cost of the damage and uncertainty created for entrepreneurs as a result of the taxes is not known.

The retrospective tax has opened the door for future governments to tax businesses in the same way.

However following Prime Minister Wickremesinghe’s speech there is perhaps an assurance that no such taxes would be charged as long as he is Prime Minister, analysts say.

Analysts say firms close to the United National Party of Ranil Wickremesinghe are likely to be targeted with one off taxes by future administrations headed by the opposition.

The ousted Rajapaksa administration expropriated businesses of a key financier of the UNP, amid stiff opposition from civil society and other political parties.





Wickremesinghe has promised to review the expropriations, which legislators have said are against the principles of law-making.

Analysts say a future administration could improve the business climate by returning the cash with interest. (Colombo/Nov06/2015)

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