VAT Increase Exploited by  Unscrupulous sellers

VAT Increase Exploited by Unscrupulous sellers

The recent Value-Added Tax (VAT) increase in Sri Lanka has woven a complex web of issues

At the core of the problem lies the rampant practice of deceptive pricing. Unscrupulous sellers are adding VAT on top of advertised prices, regardless of whether the original price already included the tax. This blatant disregard for transparency not only burdens gullible customers with a hidden tax burden but also erodes trust in the entire market system.

“It is illegal to charge more than the VAT on the price of any food item mentioned in the menu or the tag price of a product,” a Consumer Affairs Authority (CAA) spokesperson said.

The Consumer Affairs Authority’s (CAA) stance against this malpractice is commendable, but stricter enforcement and consumer awareness campaigns are crucial to curb this rampant trend.

The early announcement of the VAT increase further complicates the situation. Traders, aware of the impending tax hike, stocked up on large quantities of goods before the new tax came into effect. This pre-emptive action allows them to now sell these goods at inflated prices, including the newly implemented VAT, further squeezing the already strained wallets of consumers. The government’s rationale for the early announcement, to appease the International Monetary Fund, might hold economic merit, but the lack of foresight regarding its impact on public trust and affordability raises serious concerns.


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