Traders called upon to pay VAT only for VATable items

Sri Lanka’s retail and wholesale traders will be asked to pay 15 per cent Value Added Tax (VAT) only on the revenue from the sale of VATable goods in accordance with the proposed VAT amendment Draft Bill to be presented in parliament soon, Finance Ministry media release revealed.

According to the new bill, several essential items including private sector health services such as OPD, laboratory and dialysis will be exempted from VAT.

Although the retail and wholesale merchants whose daily turnover exceed Rs.138, 000 will be brought under the threshold for the payment of VAT, in accordance with the proposed VAT Amendment Bill, the VAT will really be charged only on the revenue accumulated on the sale of VATable goods, the ministry said.

The new amendment to the VAT Act, envisages imposition of 15 per cent VAT instead of the current 11 per cent. Though it appears that there is an increase in the rate in real terms the quantum of payment to be made under the new amendment will come down due to the elimination of the hidden payment that was in the existing system, the media release added. (Bandula)