ECONOMYNEXT – Sri Lanka’s cabinet of ministers had approved drafting changes to a value added tax law that would boost tax revenues by removing exemptions, Transport Minister Bandula Gunawardana, said.
A number of items currently exempted would be removed.
Exemptions on health, education, agriculture and items affecting low-income persons, would remain, Gunawardana said.
An arrangement called simplified VAT (SVAT) will also be terminated from January 01, 2024 to regularize reclaims.
Terminating SVAT and ending exemption were requirement under an agreement with the International Monetary Fund, a statement said. The cabinet had directed the legal draftsman to draw up the changes to the law.
The changes are expected to boost tax revenues by 1.2 percent of GDP.
An International Monetary Fund team who was in Sri Lanka last week called for higher tax revenues. (Colombo/June05/2023)