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.