Nov 10, 2017

Sri Lankan telcos upset over Cellular Tower Levy

Sri Lankan telcos, one of the highest tax payers as a percentage of revenue among Asia-Pacific are up in arms as another heavy levy had been imposed on them through the 2018 budget, telecom providers said.

Finance Minister Mangala Samaraweera has proposed to introduce two taxes for telcos through amendments to the Finance Act. 

Cellular Tower Levy has been imposed with the objective of consolidating the number of towers used by mobile operators a tax of Rs. 200,000 per month per tower will be introduced. The levy will be paid monthly by the mobile tower operator.

SMS Advertising Levy has been introduced for bulk SMS advertisements and a levy of 25 cents per SMS will be imposed and it is to be paid by the advertiser.

There are around 5,000 Cellular Towers in the country the Minister said adding that the Treasury hopes to collect Rs.10 billion from the Cellular Tower Levy.

He noted that telcos are making profits of billions of rupees and this payment is nothing for them.

Dailog Axiata maintains 2100 towers countrywide and it has to pay Rs. 5 billion as Cellular Tower Levy. Sri Lanka’s biggest mobile phone operator Dialog Axiata‘s September 2017 quarter net profit grew 31.3% to Rs3.7 billion from a year ago.

Sales rose 11.4% to Rs24.2 billion, according to interim accounts filed with the stock exchange.

During the 6 months ending 30th June 2017, the Sri Lanka Telecom group reported Rs. 37.4bn in revenue with a 2% year on year growth, while maintaining a nominal growth of 1% in operating costs.

Therefore Minister Mangala Samaraweera noted that these companies should contribute their share for the country’s development.