Business Tax Collection
1. Introduction
I. Under the powers vested in Parliament by Article 148 of the Constitution for imposing taxes, and the power to delegate such authority to another body by law, the Pradeshiya Sabha Act No. 15 of 1987 has delegated powers to Pradeshiya Sabhas to impose and collect a tax from any person carrying on a business within the local authority area. Accordingly, local authorities can impose and collect a tax on businesses conducted within its jurisdiction.
II. This tax applies to a place that is not subject to the Industry Tax, and where a license is not required under any by-law for providing a service.
2. Legal Authority
Section 152(1) of the Pradeshiya Sabha Act No. 15 of 1987.
3. Eligibility
Any person who is engaged in providing a service at a place not subject to Industry Tax and for which no license is required under any by-law is liable to pay this tax.
4. Fee Payable
The tax amount varies between Rs. 360.00, Rs. 1,200.00, or Rs. 3,000.00 based on the income from the business in the previous year.
5. Documents to be Submitted
- Business tax notice issued by the Secretary according to the prescribed format.
Note: If a person cannot submit the document, they can pay this tax by informing the front office officer of the Sabha that they are carrying out such a business and the address of the place where they perform that work.
6. Procedure for Collecting Business Tax
| Procedure | Time Period | Authority |
|---|---|---|
| Delivering the Business Tax Notice (electronically or manually) to persons listed in the register of places subject to Business Tax identified during income source surveys | Before March 31 of each year | Revenue Inspector |
| Paying the tax online where possible, or at the front office if such facility is not available | Before 7 days from the date of the notice | Person liable to tax |
| Collecting the tax and issuing a receipt | Same day | Front Office Officer |
| Recording collected tax details in the register of places subject to Business Tax and the Business Tax register | Same day | Front Office Officer |
7. Legal Consequences of Non-Payment of Business Tax
| Procedure | Time Period | Authority |
|---|---|---|
| Sending a reminder signed by the Secretary to the defaulter immediately after the payment due date | Immediately after the due date | Subject Officer |
| Handing over the request to the Magistrate, signed by the Secretary, to the Revenue Inspector | Immediately after the reminder date expires | Subject Officer |
| Filing the request in court and recording data in the case file | Upon receiving the signed request | Revenue Inspector |
| Appearing in court | On the date notified by the Court Registrar | Revenue Inspector |
| Issuing an order to recover the tax as a fine | - | Magistrate |
| Collecting the tax and issuing a receipt | Immediately upon pronouncement of the court order | Officer nominated under the supervision of the Revenue Inspector |
| Reporting collected tax details to the Subject Officer and recording the court order in the case file | Same day | Revenue Inspector |
| Recording collected tax details in the register of places subject to Business Tax and the Business Tax register | Within 2 days of receiving the Revenue Inspector's report | Subject Officer |
Notes:
- It shall be the duty of the Secretary to delegate powers to the Revenue Inspector to act with the court for recovering unpaid Business Tax.
- The necessary procedures should be arranged with the Court Registrar to assign another officer with a receipt book to the court to facilitate immediate tax collection after the Magistrate issues the order.
Business Tax - Application (Installment)