ECONOMYNEXT – Sri Lanka has allowed a nationalist tax to penalize foreign commercials to be charged for month from an earlier minimum six month charge of a half a million rupees.
In a gazette notice issued under Finance Act, a new license for one month paying 100,000 rupees was allowed by Finance Minister Mahinda Rajapaksa lowering the minimum license fee.
Sri Lanka slapped protectionist taxes on foreign tele-dramas and television commercials in 2006 amid a rise in economic nationalism, price controls, a widening license raj, and overall re-regulation of the economy and an expansion of protectionism to services.
The ousted so-called ‘Yahapalana’ administration, which claimed to start a ‘social market economy’ but continued most economic and price controls and depreciated the currency in a blatantly mercantilist bid to give advantage to business owners over workers ultimately killing economic growth also continued the protectionist taxes.
In November 2017, then finance minister Mangala Samaraweera, had gazetted a 500,000 rupee fee for a six month license to broadcast foreign TV commercials. One million rupees was charged for a year.
Under Samaraweera a credit card tax on online purchases was raised, in further services and digital economic protection.
The tax was raised to protect PickMe against Uber and Takas, an online retailer, government officials said at the time.
Under Sri Lanka’s system of government, the finance minister can change taxes at will though gazette notices and request the parliament to rubber stamp them later. (Colombo/May17/2021)