Statement

When a mobile phone user in our country pays Rs. 5,000 [as the mobile phone bill], Rs. 1,600 of it goes towards paying taxes.

Fact check

Anura Priyadharshana Yapa: not quite correct on mobile phone taxes

The Divaina reported MP Anura Priyadharshana Yapa making the above claim on the 26th of October 2018.

What the MP is saying is that when a mobile phone user’s total bill is Rs. 5,000, Rs. 1600 is paid as tax, while the remaining Rs. 3,400 is paid as the usage charge to the mobile phone company. In effect, the MP is claiming that the tax rate on the usage charge is 47.05%.

Is he correct?

In order to check the accuracy of his statement, we looked at information given by the country’s largest telecommunications operator, Dialog.

Exhibit 1 shows Dialog’s tax rates on usage charges for different types of mobile phone services at the time the MP made this statement.

As seen in Exhibit 1, the tax rate on usage charges for Voice and Value-Added Services was 49.67%, which is close to the figure of 47.05% claimed by the MP.

However, Exhibit 1 also shows that the tax rate on usage charges for other kinds of services is only 19.74%, which is a much lower figure than what the MP claimed. This means that for services other than Voice and Value-Added Services, for every Rs. 5,000 that a user pays in the form of a mobile phone bill, the tax amount would be Rs. 825, not the claimed Rs. 1,600.

Therefore, the MP's claim is true only if the mobile phone is used exclusively for Voice and Value-Added Services. However, it would be inaccurate to assume that mobile phones are used only for these services. In Sri Lanka, mobile phones are also used for data-related services and to make international calls. As a result, the tax rate on these usage charges will be less than 47.05%.

As the MP’s claimed tax rate is correct, but only for one type of service, we classified his statement as PARTLY TRUE.

Exhibit 1: Tax rates on usage by type of mobile phone service