Colombo, Oct 31 (AdaDerana) – The Cabinet of Ministers has approved to increase the Value Added Tax (VAT) up to 18% with effect from January 01, 2024.
The government said various tax-based enhancing and developmental tax policy proposals were implemented from June 2022 for the state’s financial stability based on income with the objective of ensuring loan sustainability.
As a result, the state tax revenue of the first 09 months of 2023 has escalated by 51% compared to the year 2022, but, tax collection targets agreed with the International Monetary Fund (IMF) have not yet been accomplished.
Accordingly, the Cabinet of Ministers granted approval to increase the Value Added Tax rate up to 18% from January 2024.
The amended tax will be imposed on certain goods and services to which the VAT is not yet applicable, while some of the new tax proposals will also be implemented with effect from January 01, 2024.
The new tax proposals include the imposition of the amended tax to enable the accomplishment of tax revenue and primary balance targets as agreed with the International Monetary Fund.