Sri Lanka’s business community troubled over ‘Super Gains Tax’: Here are the companies falling under this tax

Opposition has arisen by now among the Sri Lankan business community against the imposition of the Super Gains Tax on large companies through the new government’s interim budget.

While expressing his opinion on this issue to www.adaderanabiz.lk, economic analyst Hasitha Premaratne said this tax imposed on past profits is an issue. This is a proposal to impose a tax of 25 per cent on companies gaining a profit of more than Rs. 02 billion during the financial year 2013-14.

As revealed to www.adaderanabiz.lk, this has severely impacted on over 20 companies listed with the Colombo Stock Exchange while telecommunications companies are faced with a situation where they are being taxed from both ends.

While there are more likelihoods of companies like John Keells Holdings, Distilleries Company of Sri Lanka (DCSL), Ceylon Tobacco Company, Carsons, Bukit Dara, Aitken Spence, Nestle, Overseas Realty, Access Engineering, Lanka India Oil Company (LIOC), Lanka Lubricant, AHPL, HHL and Tokyo Cement falling within this tax net, there are also possibilities of banks like Commercial, Hatton National, Sampath, DFCC, Seylan, Nations Trust (NTB), National Development (NDB) banks and Ceylinco Insurance Company, Central Finance, People’s Leasing etc which represent the financial sector falling under this tax scheme.

While the Colombo Stock Market fell by about 2.7 percent today (30 January) due to this tax scare, special attention was focused on this Super Gains Tax during a post budget conference at the JAIC Hilton Hotel in Colombo this evening (30 January).

While responding to a question during this conference, Sri Lanka Central Bank Governor Arjuna Mahendran said that he does not think that this tax would affect investor confidence on the long term and that this tax has been introduced to cover the short term revenue needs of the government.

Finance Minister Ravi Karunanayake pointed out that this is a one-off tax and not applicable in the future.

Economic analyst Hasitha Premaratne said that they expect the government to raise awareness in the future on how this tax is to be imposed and that the business community has several questions on this issue.

He added that since some among these companies have already paid 28 per cent as taxes, if this 25 per cent is added then it would be 53 per cent and hence this has to be clarified.