VAT reduced to 9% from 15 %, Govt. sources say

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The Government has decided to reduce VAT to 9 per cent from 15 percent, following discussions between the President, Prime Minister and traders, official sources said on Thursday.
The sources said the new rate is effective immediately after widespread protests across the country over the earlier rate resulting in President Maithripala Sirisena having long discussions on the issue. Consumer groups have also complained about the increase saying it would hit key commodity prices.

However though Inland Revenue authorities will face a dilemma in imposing the new 9 per cent rate as it needs to be gazetted and presented in parliament for approval. Even the earlier 15 per cent proposed by Prime Minister Ranil Wickremesinghe in May is not being imposed as the change is yet to approved by parliament. At the moment tax authorities are enforcing VAT (value added tax) at the old rate of 11 per cent. - ENDS -

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