Final decision on VAT next week, says State Finance Minister Lakshman Yapa

crossroads

Apr 01, 2016 (LBO) – The final decision on Value Added Tax will be taken by next Friday, State Finance Minister Lakshman Yapa Abeywardena told LankaBusinessOnline a short while ago.

“No decision has been taken yet. It will be decided next Friday,” Abeywardena said.

Inland Revenue Department has issued a notice to the VAT registered persons saying the applicable VAT rate is 11 percent until further notice. (See below)

2016 budget initially proposed a duel band VAT system with 8 percent and 12.5 percent.

However, making a special statement in Parliament, Prime Minister recently said the VAT will be simplified to a single rate while increasing the rate to 15 percent from the current 11 percent.

Meanwhile the revenue department said the circular issued with regard to the revision of proposals made to the amendment of the Inland Revenue Act by Budget 2016 has been temporarily withheld. (See below)

The department said further announcement will be made upon receipt of proper instructions from the Finance Ministry.

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(Updated)