The much awaited tax, the ‘debt repayment levy’ has been introduced under the Finance Bill as a new tax. At the last Budget, it was proposed to impose a debt repayment levy of 0.02% on all transactions through a bank.
Extract from paragraph 286 on the special levy for debt repayment is as follows.
“….. propose to charge a Special Levy for Debt Repayment at the rate of 20 cents per Rs. 1,000 on the total transaction made through banks with effect from 1 April 2018. This will be applicable only for 3 years and shall not be passed on to the customers”.
Although the budget proposal referred to ‘banking transactions’, as per the Finance Bill the liable persons to debt repayment levy includes a finance company registered under the Finance Companies Act, No. 78 of 1988 in addition to a licenced commercial bank or a licenced specialised bank within the meaning of the Banking Act, No. 30 of 1988. The rate of tax is 7% on the value addition computed for VAT on financial services in accordance with Value Added Tax Act, No. 14 of 2002.The institution has to remit the tax to the Commissioner-General, along with a statement on or before the 15th day of the month succeeding the relevant month along with a return.
The CIMA seminar on Recent Tax Development on 19 September at the CIMA Auditorium will address all the recent amendments to the tax regime and the presentation will be Attorney – At – Law, LLB, FCMA, CGMA Suresh R. I. Perera.
The seminar will cover Amendments to VAT and NBT, Tourism Development Levy, Share Transaction Levy, Construction Industry Guarantee Fund Levy, Luxury Tax, Vehicle Entitlement Levy, Debt Repayment Levy, Carbon Tax, Cellular Tower Levy, Levy on Mobile SMS, recent developments with regard to Income Tax, and Amendments to Land (Restriction on Alienation) Act.
Please contact CIMA on 011 2503 880 – extension 260 to register.