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BOI companies will be pulled into the local tax net for the first time from April this year, through the Economic Service Charge (ESC). "The BOIs were not expected to pay ESC last year but from April this year they must also start paying ESC," said R P L Weerasinghe, Commissioner General, Inland Revenue.
According to the BOI over 1,600 companies were in commercial operation under BOI status by end of last year.
These companies are liable for ESC at the rate of 0.25 percent a year on turnover, if the turnover is over Rs 50 mn and the company is in business for more than three years.
Non-BOI companies on the other hand pay a much higher one percent on turnover as ESC and were paying up since last year.
Inland Revenue officials say ESC collection came to Rs 4 bn in by December 31, 2004 and by now ESC payments total close to Rs 5 bn.
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The tax collectors are hoping to net in another Rs 4 bn through BOIs this year and say that at least 1,000 BOI companies are in a position to pay ESC.