COLOMBO - The Sri Lankan Government has imposed a 0.9 per cent tax on all funding for aid groups, hampering their efforts to help victims of Sri Lanka’s recent civil war.

According to aid workers, most agencies did not comply with the new tax immediately, as they hoped to persuade the Government to change it.

However, the Government has grown increasingly hostile towards foreign aid groups and Western donors, accusing many of sympathising with the Tamil Tiger rebels.

It has started to insist that all 89 local and international NGOs, mostly helping victims of the 2004 tsunami and the 26-year civil war, should pay the 0.9 per cent tax on all their funding - backdated to 2005, Times Online reports.

In 2005, British charity Oxfam was forced to pay more than 600,000 pounds in tax for importing 25 Indian four-wheel-drive vehicles to Sri Lanka for tsunami relief.

Another charity ‘Save the Children Fund,’ which has received about 35.6 million dollars in Sri Lanka between 2005 and 2009, was originally asked to pay about 350,000 pounds for 2005-09. It has negotiated that down to about 20,000 pounds for 2005-07.

Others have been less successful in their negotiations, mostly because Sri Lankan authorities said that they did not have the correct paperwork.

World Vision, the US-based Christian relief group, has paid 120,000 dollars for 2005-06, and made advance payments of 200,000 dollars for the following three years

“If it’s non-profit work, it shouldn’t be taxed - there should be incentives to work in particular areas instead,” said Jeevan Thiagarajah, the executive director of the Consortium of Humanitarian Agencies.

“This is a desperate money-making measure by the Government,” a charity worker said.

However, the Lankan Government says that the tax is designed to crack down on NGOs that abused Sri Lankan law and squandered their funds on their own staff after the tsunami. (ANI)