Sri Lanka Customs has highlighted the need to impose a tax on the importation of digital content, such as software.
According to the first report of the Parliamentary Committee of Ways and Means, the requirement was raised considering the growth of the domestic information and Communication Technology (ICT) sector.
Sri Lanka Association for Software Services Companies (SLASSCOM) data states the ICT sector in Sri Lanka became the third highest exporter in 2022 with US$ 1.5 billion in export revenue and has a workforce of over 150,000 employees.
The Morning reports that in the first half of 2023, Sri Lanka Customs recorded a revenue of Rs. 400 billion, against an annual revenue target of Rs. 1.2 trillion which was later revised to Rs. 970 billion.
However, Sri Lanka Customs had initially presented the committee with a forecasted revenue of Rs. 638,673 million for the year 2023 by analyzing the trends for the year.
Therefore, the Parliamentary Committee recommended that the Harmonized System Codes (HS codes) and a digital tax for digital content and services be introduced.
The Committee also recommended that the measures be taken after conducting a comprehensive study on the impact of the new tax on the ICT sector and the best practices of other countries. (NewsWire)