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The Value Added Tax (VAT) rate is scheduled to be increased to 15 percent from May 2nd, according to the Finance Ministry, and will include the telecommunications sector.
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The new government is people friendly, Sirisena pointed out, speaking to a gathering in Polonnaruwa. Sri Lanka is currently in talks with the IMF for a 36-month facility of at least one billion dollars to support the island's foreign reserves.
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During these discussions the IMF has rightly pointed out that fiscal consolidation is necesssary. State Minister of National Poicies and Economic Affairs Niroshan Perera told reporters on Monday that the plan to increase the VAT rate was not due to pressure by the IMF.
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"There is no IMF pressure, Sri Lanka makes decisions as a sovereign nation," he said.
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"If there is a challenge we must take steps to address it.
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Our debt burden is higher than expected, and that is why this decision is being taken," he added. Perera said: "We expect that, within a short period of time and with a strengthened economy, we can return concessions to the people.
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Imposing VAT on Supply of healthcare services is unjustifiable as medical benefits are included as part of employment income and is subject to income tax as well. In effect an employee will be taxed at 31% on income received from employment. (15% VAT on medical expenses + 16 % on total employment income)
Imposing VAT on Supply of healthcare services is unjustifiable as medical benefits are included as part of employment income and is subject to income tax as well. In effect an employee will be taxed at 31% on income received from employment. (15% VAT on medical expenses + 16 % on total employment income)
instead of reducing vat they are increasing it . It is nincumpoop policy, basicly the ministers are nuts. They should have sold CEB ,CPC and Sri Lankan Airlines and AIrport and ports through IPO. It will not only reduce budget defercit but also the country would be able to curtail losses. Losses of state enterprises should not be borne by people of this country.