As per the Finance Act, No. 35 of 2018, A levy of 7% is charged monthly on the value addition attributable to the supply of financial services from a licensed commercial bank or a licensed specialized bank within the meaning of the Banking Act, No. 30 of 1988 and finance company a licensed under the Finance Business Act, No. 42 of 2011.
The Act imposes this levy in the following manner;
- Liable Persons: a licensed commercial bank or a licensed specialized bank within the meaning of the Banking Act, No. 30 of 1988 and a finance company licensed under the Finance Business Act, No. 42 of 2011.
- Collection Authority: Commissioner General of Inland Revenue.
- Value Base: Value addition computed for the purpose of VAT on FS in accordance with the Value Added Tax Act, No. 14 of 2002, before deducting VAT on FS, NBT on FS and DRL. Hence, the value base on which DRL is imposed is higher than the value base for imposing VAT on FS and NBT on FS.
- Rate: 7% on value base
- Applicability: For the period from October 1, 2018 to December 31, 2021.
- Payment Due Date: Payment should be made on or before the 20th day of the month succeeding the relevant month, with the value addition statement.
- Return Due Date: A Return (as specified by the Commissioner- General of Inland Revenue) should be furnished within a period of 6 months from the end of the financial year.
- Exemptions: The Minister is empowered to exempt any transaction by order published in the Gazette Notification.
- Penalty, assessment, recovery, appeal procedure: Based on the relevant provision of the Inland Revenue Act, No. 24 of 2017
Download:
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IRD Notice on Debt Repayment Levy (DRL)
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Monthly Value Addition Statement of Debt Repayment Levy
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DRL Circular No. SEC/2019/03 [NEW] – 24 June 2019
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Finance Act No.35 of 2018 [English | Sinhala]
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Tax Alert on Finance Act, No. 35 of 2018 – by Ernst & Young