VAT hike to swell government coffers by Rs. 100 bln annually
View(s):With the Supreme Court’s determination of ‘consistency with the Constitution’ and consent of parliament, the Value Added Tax (VAT) hike up to 15 per cent from 11 per cent will bring additional revenue of Rs. 100 billion per annum for government coffers with effect from November 1, a senior Finance Ministry official said.
The government is seeking total revenue of Rs.280 billion from VAT this year as the Inland Revenue Department (IRD), Director General of the Department of Fiscal Policy A.K. Seneviratne told a media conference held in Colombo on Friday.
The government is taking every possible step to widen the tax base and it will enable the Treasury to bring down VAT, he said adding that only 15,000 traders and businessmen are registered to pay VAT when this number should be very much higher.
The IRD is in the process of tracking down traders liable to pay VAT using the new Revenue Administration and Management Information System (RAMIS), he revealed.
Answering questions raised by journalists, he noted that with the 15 per cent VAT people will have to pay 0.3 per cent more for their telephone call charges.
He pointed out that the milk powder being produced by using local liquid milk is exempted from VAT while imported milk powder is liable for VAT. However local milk powder added with sugar is liable for VAT, he emphasised.