ECONOMYNEXT – The Ceylon Electricity Board (CEB), Sri Lanka’s state-owned utility provider, will charge an additional 2.5 percent of social security tax of the total electricity bill with effect from October 01, the Public Utilities Commission of Sri Lanka (PUCSL) said.
PUCSL Chairman Janaka Ratnayake said on Thursday October 27 citing a communique from the ministry of finance that according to the Social Security Contribution Levy Act, electricity is subject to the new tax.
The Social Security Contribution Levy Bill was passed by majority vote in parliament on September 08. The levy was first announced in the budget for 2022 in a bid to raise government revenue after the economy was hit by the COVID-19 pandemic.
This tax is imposed at the rate of 2.5 percent on the importers, manufacturers, service providers and wholesalers and retailers with an annual turnover of more than 120 million. The expected revenue from this tax per year is 140 billion rupees.
In mid-August, the electricity tariffs were raised for the first time in nine years by 75 percent in order to minimise the continuing losses incurred by the CEB.
Opposition legislator Harsha de Silva has called the social security contribution levy a travesty.