Sri Lanka to charge ‘debt recovery levy’ on banks from Oct 01

ECONOMYNEXT – Sri Lanka’s banks will be charged a ‘ debt recovery levy’ on banks October 01, 2018 and not September 01, 2018 according to changes proposed to the island’s finance act.

The current administration came to power promising to lower the total number of taxes, making it easier to do business, but a so-called ‘robin hood’ budget in 2015 went against the policy.

The debt recovery levy however will have a sunset provision ending it on December 31, 2021.

The finance ministry had said the temporary tax was required because of the large debt repayments that are spiking in the period.

According to changes proposed earlier, it would be 7 a percent tax calculated on ‘applying the attributable’ method specified in the Value Added Tax of 2002.

The banking sector is an easy target for tax. (Colombo/Sept24/2018)

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