+94 35 22 89 075
Mon-Fri :8.30 - 16.15 / Closed on Weekends
Collection of business tax
1. Introduction
(a) Under the powers vested in Parliament under Article 148 of the Constitution to delegate its powers to impose a tax to another authority under any law, any Pradeshiya Sabha under the powers vested in it under the Pradeshiya Sabha Act, No. 15 of 1987, has been vested the powers to impose and levy a tax on any person carrying on any business within the limits of the local authority. Accordingly, any local authority may impose and levy a tax on any business carried on within the limits of the local authority.
(b) In the case of a place that is not subject to industrial tax and where By-laws have not required a license for a place where a certain business of providing a service is carried on, such business shall be subject to this tax.
2. Legal Authority
(a) Paragraph (1) of Section 152 of the Pradeshiya Sabha Act, No. 15 of 1987.
3. Eligibility
In the case of a place that is not subject to industrial tax and a person who is not required to obtain a license under the provisions of a by-law and who is engaged in the work of providing services is liable to pay this tax.
4. Fees
The business tax notice issued by the local authority
Note:
The amount of tax varies according to the takings of the business for the year preceding.
The tax depending on the amount of the takings of the business for the year preceding which-
| Description | Business Tax |
|---|---|
| Does not exceed Rs. 6,000.00, | Rs. Nill |
| Exceeds Rs. 6,000.00 but does not exceed Rs. 12,000.00 | Rs. 90.00 |
| Exceeds Rs. 12,000.00 but does not exceed Rs. 18,750.00 | Rs. 180.00 |
| Exceeds Rs. 18,750.00 but does not exceed Rs. 75,000.00 | Rs. 360.00 |
| Exceeds Rs. 75,000.00 but does not exceed Rs. 150,000.00 | Rs. 1,200.00 |
| Exceeds Rs. 150,000.00 | Rs. 3,000.00 |
5. Documents to be submitted
Business tax notice issued by the Secretary as per the format attached hereto.
Note: If a person is unable to produce the tax notice, tax can still be paid by informing the Officer of Front Office of the local authority that he is carrying on a business of the nature aforesaid and the address of the place where he is carrying on the business.
6. Procedure to Levy Business Tax
| Procedure | Duration | Responsibility |
| Delivery of business tax notice by e-mail or by hand to persons mentioned in the Register of Business Taxable Places identified in the Source of Income Survey (Annexure) | Before 31st March every year | Revenue Inspector |
| Pay tax online if it is possible to pay through internet facility, otherwise, pay to Front Office | Before the expiry of 7 days from the date of the notice | Taxpayer |
| Levy the tax and issue a receipt | On the day itself | Officer of Front Office |
| Enter information about tax collected in Register of Business Taxable Places and in the Register of Business Tax | On the day itself | Officer of Front Office |
7. Legal Consequences of non-payment of business tax
| Procedure | Duration | Responsibility |
| Send reminders to persons who fail to pay tax by the due date under the hand of the Accountant/ Secretary | Immediately upon the lapse of the due date to pay tax | Officer in charge of subject |
| Obtain signature of Secretary to the application to Magistrate in respect of those who fail to pay tax by the date fixed by the reminder and forward to Revenue Inspector | Immediately upon the lapse of the date specified in the reminder | Officer in charge of subject |
| File the application in the Magistrate courts and enter data thereon in the case file | Immediately upon receiving the signed application | Revenue Inspector |
| Appear in courts | On the day as notified by Court Registrar | Revenue Inspector |
| Make an order to charge the taxes due as a penalty | Magistrate | |
| Levy taxes and issue a receipt | Once the court declares its order | Nominated officer under the supervision of Revenue Inspector |
| Report the information about the tax collected to Officer in charge of subject and record the court decision in the case file | On the day itself | Revenue Inspector |
| Enter information about tax collected in Register of Business Taxable Places and in the register of business tax | Within two days from receiving the report of Revenue Inspector | Officer in charge of subject |
Note:
1. It shall be the duty of the Secretary to delegate powers to the Revenue Inspector to proceed with court action to recover the unpaid business tax.
2. Necessary arrangements for sending another officer to the court with a receipt book should be made in consultation with the court registrar, to facilitate the collection of tax immediately after issuing the order by the Magistrate.
| Sample Business Tax Notice for the year 20xx | Download |