Sri Lanka approves increase in Value Added Tax (VAT) to 18%

Summary:

• The Sri Lankan government has approved an increase in the Value Added Tax (VAT) to 18% starting from January 2024.
• Additional VAT will also be imposed on certain goods and services that are currently not taxed.
• The government has taken significant steps to increase tax revenue, which has seen a 51% increase in the first nine months of 2023 compared to 2022.
• However, the government has failed to meet tax collection targets agreed upon with the International Monetary Fund (IMF), resulting in a delay in the release of the second tranche of IMF’s financial aid package.
• Sri Lanka had previously reduced VAT from 15% to 8% in 2019, and then raised it twice to 15% in 2022.

–@DelhiBreakings.com

int/svn