• Bandula says exemption given based on requests received
• Decision taken despite 45% Govt. revenue shortfall in January
• Anticipated revenue of Rs. 250 bn per annum from levy to go down after decision

The Cabinet has approved amendments to the Social Security Contribution Levy (SSC) Act to exclude certain exporters and other foreign exchange-earning entities from the tax net while the Government has recorded a revenue shortfall of about 45% than estimated in January.

Speaking at the Cabinet briefing held yesterday (31), Cabinet Spokesman Bandula Gunawardana said that, based on requests made by certain exporters and other foreign exchange-earning entities to the Finance Ministry, the Cabinet has decided to approve the amendments to the Act to be presented at Parliament.

He said that the relevant individuals and companies have stated their concerns and inability to continue their business if they are going to be taxed under the SSC.

The SSC will be charged from any importer, manufacturer, service provider, wholesaler, and retailer with an annual turnover exceeding Rs. 120 million at a rate of 2.5%.

Moreover, Gunawardana said that the total revenue earned by the Treasury in the month of January is recorded at Rs. 158.7 billion compared to the estimated monthly revenue of Rs. 288 billion according to Budget 2023.

However, the expenses stood at Rs. 515 billion, out of which Rs. 377 billion was used for debt servicing; the estimated allocated monthly expenditure by Budget 2023 is Rs. 656.62 billion, prior to the 6% reduction in recurrent expenditure.

The Minister said that the shortfall in revenue was covered by issuing Rs. 113 billion worth of Treasury Bills, Rs. 198 billion worth of Treasury Bonds, and provisional advances amounting to Rs. 100 billion by the Central Bank in the month of January.

The SSC levy estimates a total revenue collection of Rs. 250 billion in 2023, which will be likely to reduce with the addition of exceptions.