News
Treasury to directly collect Special GST and VAT
The Treasury will be empowered to collect the proposed Special Goods and Services Tax (GST) and the revised Value Added Tax in future.
The move will reduce the powers of the Inland Revenue Department, confining it to the collection of income tax.
A Bill proposing that the Treasury Secretary sets up a unit under the purview of a Deputy Secretary to the Treasury has been gazetted accordingly.
The designated officer will be responsible for the administration, collection and accountability of the Special GST while the Treasury Secretary will assign the required number of officers from the Finance Ministry to carry out the collection of taxes.
The proposal to introduce the new GST which is a composite of VAT and other respective levies was proposed in the Budget for 2022.
The practice of respective institutions such the Excise, Customs, Airport and Port collecting taxes will be changed with the new system.
It was also proposed that the VAT be increased by three percent on key revenue-making financial industries, motor vehicle imports, tobacco and liquor.
The GST will be applicable to all of them in addition to telecommunications, betting and gaming services, according to the Bill.
According to the General Treasury, the GST tax is introduced to avoid complexities related to the application and administration of a multiple tax regime on specified goods and services. The new tax replaces a separate collection of Excise duty,
The Telecommunication levy, Customs duty, cess and similar taxes are to be combined under one single tax regime.
Presenting the budget in November, Finance Minister Basil Rajapaksa urged those relevant industries to bear the three per cent increase and not to pass it on to the consumers.
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