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Away from home FTZ workers badly hit by VAT on phone calls
Trade unions claimed last week that the imposition of Value Added Tax (VAT) on telephone bills is a major blow to workers in the Free Trade Zone.
Free Trade Zones and General Services Employees Union General Secretary Anton Marcus said that while the VAT increase has pushed up the cost of living of the average worker the VAT on the telephone bills is affecting the workers most.
He said that 90 % of the workers in the Free Trade Zone (FTZ) are from remote villages. They have left their families behind to work in the factories. He said the link to their families is the mobile phone and the VAT increase would increase their telephone bills considerably. In addition there is a tax increase on water which will also affect the workers adversely.
Mr. Marcus said the prevailing drought has dried up the wells and the factory workers buy bottled water to drink. “Now VAT has shot up the price of bottled water from Rs. 30 to Rs.50,” he said.
This is because the major part of the pipe borne water is used up by the factories whilst homes the workers living in receive very little water.
Also, although the Government had assured essential goods will not be taxed the price increase in lubricants and accessories for vehicles has raised the transport cost of goods and small businesses are transferring the additional cost to end users. “The small grocery stores where these workers buy their provisions have also increased the prices of essential goods,” he said.
Moreover the Lanka Private Bus Owners’ Association said the annual increase in bus fares is due in July with the increase going up by 8%.
The National Movement for Consumer Rights Protection will hold a protest in front of the Telecommunication Regulatory Commission (TRC ) offices today (Sunday) demanding that the VAT on telephone bills be scrapped.
Chirantha Amarasinghe, a member, said that although the Government said the VAT increase is 15% the telecommunication service providers are charging 19.53 % VAT on calls.
He charged that the consumers are being subject to VAT twice. Explaining, he said that in 2011 when the Government increased the tax on telephone bills to 20% it was told that the tax included VAT, the Nation Building Tax (NBT) and the cellular mobile subscriber levy.
Now again a VAT has been imposed, he said.
Meanwhile Sri Lanka Telecom General Manager (Tariffs) Praba Ambegoda confirmed the VAT is calculated at 19.53%. “Our auditors have advised us to charge an effective rate of 19.53% VAT,” he said.
The National Freedom Front (NFF) led by Wimal Weerawansa has filed a fundamental rights petition in the Supreme Court seeking an injunction on the implementation of the VAT. It is argued that the VAT has been introduced illegally as it has not got Cabinet approval.