Sri Lanka’s government is increasing the country’s Telecommunication Levy from 11.25% to 15% as part of a broader spate of tax hikes that will also see VAT rise from 8% to 12%.
CommsUpdate reports that the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has been ordered to implement the Telecommunication Levy increase with immediate effect by the new Prime Minister and Minister of Finance Ranil Wickremesinghe.
The tax increase reverses a previous reduction implemented in December 2019 which saw the levy cut from 15% to 11.25%. The government argues that this “led to a decrease in revenue by 28% to LKR13.1 billion in 2020 from LKR18.3 billion in 2019.”
The government is reportedly mulling a wider income tax reform, with the Prime Minister’s statement claiming that tax revenue fell by LKR600 billion–LKR800 billion annually following the election of President Gotabaya Rajapaksa at the end of 2019. Rajapaksa implemented a wave of tax cuts that critics claim haemorrhaged government revenue, fomenting Sri Lanka’s current economic crisis.
However, the shortage of government funding has not hampered the ambition of state-backed fixed and mobile operator Sri Lanka Telecom (SLT-Mobitel), which has revealed plans to connect communities across all of the country’s districts with fibre-optic network infrastructure as part of its One Million Fibre Project.
STL-Mobitel plans to deploy one million fibre connections “within a record period… enabling seamless access to transition into an era of digital services.” Currently around 500,000 households in Sri Lanka have fibre access, and the operator has set a target of two million fibre connections by the end of 2023.