Nation Building Tax (NBT) Bill giving legal effect to the 2009 Budget Proposals relating to the imposition of Nation Building Tax (NBT) was passed by parliament on January 7, 2009. NBT Tax Act No. 9 came into operation with effect from February 1st 2009.

NBT is payable by every person ( individual, company, body of persons) or partnership who:

  • imports any article (other than any article in the personal baggage) into Sri Lanka, or
  • carries on the business of manufacture of any article, or
  • carries on the business of providing a service of any description

Chargeability

Every liable person whose, liable turnover for any quarter exceeds Rs. 650,000/= should be registered with the Nation Building Tax (NBT) unit of the Department of Inland Revenue.
 

Rates

  • 1% on the liable turnover from 1/2/2009 to 30/4/2009; and
  • 3% on the liable turnover with effect from 1/5/2009
  • The Nation Building Tax (NBT) rate applicable to turnover from the sale of rice manufactured from locally procured paddy is reduced from 3% to 1.5% from 01/07/2009

Liable Turnover

  • In the case of importer; the value of any article ascertained under section 6 of the Value Added Tax Act for the purpose of importation
  • In the case of manufacturer the proceeds receivable whether received or not from the manufacture and sale in Sri Lanka
  • In the case of service provider; the proceeds receivable whether received or not


Note: Bad debts, VAT and Excise Duty should not include to the liable turnover.
 

Returns

Return of Nation Building Tax (NBT) should be furnished on or before 20th day of the month immediately succeeding the end of that relevant quarter.

  • 1st Quarter: January to March - Prior to 20th April
  • 2nd Quarter: April to June - Prior to 20th July
  • 3rd Quarter: July to September - Prior to 20th October
  • 4th Quarter: October to December - Prior to 20th January

Credit for NBT

Only a manufacturer is entitled for a credit of NBT paid by him and even it should be in respect of any article imported by him, or purchased by him from another NBT registered manufactured and also such article should have been used exclusively in his business of manufacture. A service provider is not entitling for any credit for NBT paid by him. If there is any balance can be carried forward to be set off against the NBT payable in the subsequent quarter. However, there are no refunds of NBT to any registered person.
 

Exemptions

There is a great deal of articles and services which are not liable to this tax and the advice of a tax lawyer should be sought.