Definition

Business Turnover Tax was first introduced in Sri Lanka by the finance Act No.11 of 1963 to become effective from 1^st January 1964. With the introduction of 13^th amendment to the constitution of the Democratic Socialist Republic of Sri Lanka, revenue sources from 36:1 to 36:20 of the 1^st list (Provincial Council list) of the 9^th schedule of the constitution have been devolved to the provincial council According to the finance statute No. 06 of 1990 of Sabaragamuwa Province the Provincial Revenue Department imposed to collect turnover tax on wholesale and retail sales, since 1991.

The main revenue source of the Sabaragamuwa provincial council has been collected turnover tax since then. That was Rs. 49.8 million. In 1991 and Rs. 839.38 million in 2010. But  Turnover Tax on whole sale and retail sales that was devolved by the 13^th amendment of the constitution was cancelled by the appropriation bill of 2011 passed by the parliament However the default  tax before 31^st  December 2010 have been collected by the department up to now.