The regulatory risks have risen for telcos since the new government assumed office in 2015. The government has increased taxes on telcos in an effort to shore up revenue.
Effective from May 2016, the government imposed a value-added tax (VAT) of 15% and nation building tax (NBT) of 2% on telecom services which will increase tax on voice and data services to 50% and 32%, respectively (earlier: 28% and 12%).
The government had abandoned an earlier tax proposal which could have diluted the industry’s EBITDA margin by an average of 6%-7%. Fitch revised the outlook on Sri Lanka’s telco sector to stable from negative on 18 January 2016 following the new government budget.
Source: http://www.dailynews.lk/?q=2016/05/24/business/82573
