Financial Times

SLT reveals Rs 689 mln liability on special levy
Sri Lanka Telecom (SLT) has revealed that it is liable to pay over two billion rupees to the government under a special levy on international incoming phone calls but two-thirds of which is refundable to spend on building the network in rural areas.

This means the company has a net liability of Rs 689 million under this levy. The company said in an announcement last week on its latest quarterly results that a bill to make provisions for the imposition of the levy on international telecommunication operators has been passed by parliament.

"SLT is required to make a contribution to the government at the rate of US$ 0.038 per international incoming traffic minute from March 3, 2003," it said in a statement. "The bill provides for a refund of two-thirds of the levy for rolling out the network in rural areas."

The total amount of the levy from March 3, 2003 to September 30, 2004 has been estimated at Rs 2,067 million and has been recognised as an expense in the current financial year. Out of this Rs 353 million relates to the current quarter. The corresponding liability has been recognised in the balance sheet.

"The refund in respect of rolling out the network in rural areas has been estimated at Rs 1,378 million but has not been recognised in the financial statements, as the regulations for such refund have not yet been finalized," SLT said.

SLT's net profit fell one percent to Rs 805 million in the quarter ending September 30 although revenue rose 17 percent to Rs 7.5 billion. Pre-tax profit rose two percent to Rs 1.2 billion in the same period. Cash generated from operations fell to Rs 8.6 billion in the nine months ending September 2004 from almost Rs 12 billion in the previous period.

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