Hidden charges of Mobile service providers

Indicating and Real Taxes 

This is about the unfair story of Taxes which are applicable for mobile services. As per Statutory requirement, 25% is the correct tax rate with all components. However mobile service providers of Sri lanka are Charging 28.36% from their subscribers using this formula. Seems like 100% correct. But….



As per Mobile service providers, MSL NBL counting first before the VAT.

ECL – 100*2%= 2

MSL – 114.61*10% =11.46

NBL – 114.61*1%=1.15

2+11.46+1.15=14.61 (114.61 with x value)

After that, VAT calculating from 114.61 (result with NBL MSL ECL). 13.75 %( VAT) is correct if the value 114.61 is correct. How they got that 114.61? This is the error of formula

At first calculate the 114.61 (I don’t know how). Then calculating the percentages of NBL & MSL from that value. How are you calculating the percentages from unknown value? You can get the correct value (114.61 in this formula) by adding the percentages of NBL MSL & ECL.

Out of 4 tax components, only one is correct. Other components are wrong. VAT component is correct if the total value with NBL ECL & MSL is correct (114.61 in this formula). If the 114.61 is correct, VAT component also correct. If its wrong, VAT component also wrong.

The entire subscribers are paying something more than the statuary requirement to their service providers. Are they paying this amount to the government (Inland Revenue or TRC)?

Although if you are a VAT registered entity; you can claim only 12% (VAT) from the Inland Revenue (if you have the privileges of claiming)  

We can call these things as Hidden Charges

Can you take a legal action? Yes you can. But that’s up to you


Note    Article of Danuka Peiris. All Rights reserved. 



  1. That’s how the taxes are calculate on all goods & servises. (what we called as tax on tax). This is not illegal since it is accepted every where. If you check taxes on some other thing, it would be sames as this.

  2. no this is not like others. check the formula again. u cant create a formula like that. thats basic Mathematics. there are some taxes which are charging after some tax components.(eg. VAT). thats correct. but not like this.

  3. The formula is enforced by the TRC. All mobile operators will be happy to charge as less tax as possible from a consumer, unfortunately this is how the regulators wish to collect taxes in a compound manner..

    I can assure you that none of the mobile operators are cheating customers on taxes, as they are being audited and if so would have been brought into courts by now. 🙂

    If I find the time, I’ll put up a post on how the taxes are calculated. Give you guys a better understanding on how you come up with the figure.

  4. do u agreeing with the formula? No if you are a customers. im not saying this is as a cheating. however by using an unfair formula, cx will be charging than the statutory requirement.

    pls check with your finance. cx cant refund the additional taxed amount from Inland revenue. pls post the way of charging the tax. then i can show the unfairness of that formula.

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