Social Security Contribution Levy – SSCL
The social Security Contribution Levy is a payable tax which was based on taxable turnover. As a part of the budget 2022, Social Security Contribution Levy Act, No.25 of 2022 was approved and certified on 20 September 2022. Accordingly, Social Security Contribution Levy (SSCL) was introduced with effect from 01 October 2022. So, this tax was in operation beginning of 3rd quarter in 2022-2023 financial year. Rebuilding the economy is the main goal of this levy.
According to this tax,
- All importers of any article
- Manufacturers of any article
- Providing a service of any description
- Wholesale or retail of any article
Are entitled to register the SSCL excluding exempted services.
Main Exemptions of SSCL Tax
SSCL Tax have many exemptions on several industries. Fertilizer manufactures, Petroleum companies, Dairy products manufactures, Garments, Hotels, Pharmaceutical companies have positive impact in this tax. And a main thing is this tax is not covering travel and tourism industry, and export businesses which generates foreign income. An Example is Local business activities are covered through this tax in hotels, but tourism and activities related to foreign currency are not covered. Dairy Product manufactures also have very good positive impact in this tax, this means lot of items in dairy industry, exempted in SSCL.
Exempted Goods
- Any good exported by the manufacturer.
- Any good imported by any person exclusively use in manufacture for export excluding plant, machinery, or fixture.
- Any spare parts imported by any airline or a shipping company.
- Imports subject to special commodity levy
- Fertilizers
- LP Gas
- Petroleum and Petroleum products
- Coal
- Pharmaceuticals
- Tea supplied by the manufacturer
- Raw materials or packaging materials imported for manufacturing of Ayurvedic Preparations
- Solar panel modules, accessories or solar home systems for the generation of solar power energy.
- Fresh milk, green leaf, cinnamon, or rubber purchased from any local manufacturer or local producer
- Breeding animals, milking machines, dairy machines and spare parts under relevant HS Codes.
Exempted Services
- Generation and supply of electricity other than the supply of electricity by the Ceylon Electricity Board
- Medical services
- Supply of water
- Transportation of goods and passengers
- The business of life insurance
- Any service provided by the Central Bank of Sri Lanka
- Services provided by any Government Department, Ministry or Local Authority
- Any services provided by the Employee’s Trust Fund, Provident Fund, Pension Fund, Pension Trust Fund and Gratuity Fund
- Distribution, Production and supply of films for exhibition in cinemas
So, Any Importer, Manufacturer, Service provider, Wholesaler or Retailer excluding above exemptions must pay this tax and they should register on SSCL by submitting an application form to CGIR (Commissioner General of Inland Revenue) within 15 days of the date of operation of the Act.
According to the Act, these are the thresholds of SSCL Tax.
- Every person with total turnover above 120,000,000 (120 million) Sri Lankan Rupees, within 12 months (prior to the date of the operation of the Act)
- Every person with total turnover above 30,000,000 (30 million) Sri Lankan Rupees within a quarter.
The Rate and Liable Turnover of SSCL
Liable Turnover means the fraction of the total turnover which subject to the tax. The rate of SSCL Tax is 2.5% on the liable turnover.
- Importation of any good or service – 100% of turnover
- Manufacture of any good or service – 85% of turnover
- Service provider – 100% of turnover
- Wholesaler and Retailer including import and sale – 50% of turnover
- Distributors of Wholesale and Retail related to Sri Lankan manufactures – 25% of turnover
E.g.:- If a manufacturing company has a 120 million LKR turnover, this company should calculate the tax as follows,
120 MN × 85% × 2.5%
Payment of the SSCL Tax
This tax is payable on a self-assessment basis in three monthly installments. So companies should pay this tax as monthly basis. Due dates as follows.
| Installment | Payment Date |
| 1st Installment | Tax due for first month, should be paid on or before 20th day of second month |
| 2nd Installment | Tax due for second month should be paid on or before 20th day of the third month |
| 3rd Installment | Tax due for third month should be paid on or before the 20th day of the first month of next quarter. |
Tax payers can pay this tax via any branch of Bank of Ceylon.
In the payment slip, these details should be included.
- Payment period code – (Format: YY/Q/0/M)
- Tax type code – (32)
- TIN and Usual other details
Submitting the SSCL Tax Returns
SSCL Tax returns should be submit on or before the 20th day of the following month of the end of that relevant quarter.
| Quarter | Due Date |
| 1 (01st January – 31st March) | On or before 20th of April |
| 2 (1st April – 30th June) | On or before 20th of July |
| 3 (1st July – 30th September) | On or Before 20th of October |
| 4 (1st September – 31st December) | On or Before 20th of January |
Every Registered person in SSCL, should pay this tax on Accrual Basis. That means you should account for this levy, when you earn, regardless of when payment is made.
Penalties
- Failure to Apply for Registration within the period – Penalty of sum not exceeding 25,000/=
- Failure to furnish Return – Penalty of a sum not exceeding 50,000/=
- Default of payment
- 10% of the amount in default; and
- An additional 2% for each additional month of default.
