Sri Lanka’s Dialog Telecom, customers pay Rs317bn to state

ECONOMYNEXT – Sri Lanka’s Dialog Telecom paid income taxes and levies of 31.7 billion rupees to the state, on net revenues of 86.7 billion rupees, data published by the firm sid.

The firm itself paid 10.7 billion rupees in fees and levies to the government, Dialog chief Hans Wijayasuriya told shareholders in the annual report.

Dialog pays income taxes at 2 percent of revenue under a lon-term deal with the Board of Investment concession, which can be a high rate of taxation in a low-margin business or a low rate in a high-margin business.

Telecom firms also pay frequency fees to the telecom regulator.

The group reported 1.5 billion rupees of corporate tax and pre-tax profits of 10.5 billion rupees, up from 6.7 billion rupees a year earlier. The core telecom firm reported pre-tax profits of 11.9 billion rupees.

Turnover taxes of 21 billion rupees on revenues of 86.7 billion rupees indicate that telecom users pay around 24 percent in turnover taxes in a country with a maximum 15 percent value-added tax rate.

Sri Lanka’s current administration raised taxes on telecom firms in what was called ‘revenge taxes’, undermining the country’s standing as a safe destination for investment. Sri Lanka’s telecom sector became a tax cash cow for the government following the de-regulation and privatization of the sector under then-telecom minister Mangala Samaraweera.

Samaraweera broke a state monopoly in fixed services and licenses for mobile players. Telecom privatization ended 10-year waiting lists, as well as low call connection rates in a congested network.

Prices initially spiked amid tariff rebalancing involving slashing of global termination fees, and fell amid increased competition later. (Colombo/Apr20/2017)





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