Many items will increase in price as the new value-added tax regulations are implemented in January.
As the parliamentarians give their nod to the budget proposals, many VAT exemptions will be removed. books and magazines to fruit seeds, pearls, diamonds, and public library services by the state, a provincial council or local authority will have to pay taxes, undoubtedly crippling these services.
Cellular mobile phones, computers, and computer accessories; construction, rice milling and milk processing machinery; hi-tech medical equipment; machinery and equipment for use in the leather or bag industries; taxi meters; agricultural machinery and parts; items and spares for the poultry industry; and energy-saving bulbs, are also on the newly priced list.
President Ranil Wickremesinghe has lost no time in explaining what great proposals are:
“This brings Sri Lanka in line with regional peers, including India and Pakistan, in terms of the standard VAT rate,” he said.
The service sector will also have a severe impact from the new increases.
Services provided by a person in Sri Lanka to another person outside Sri Lanka and paid Sri Lanka rupees will be liable for VAT
Government services will also be liable to tax increases
Department of Commerce, the Board of Investment,, and Sri Lanka Ports Authority and activities of the Sports Ministry will be taxed
Locally manufactured coconut milk produced by disabled soldiers will also be taxed.