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Sri Lanka Hikes VAT Rate To 15 Percent

by Mary Swire, Tax-News.com, Hong Kong

01 November 2016


Sri Lanka's headline value-added tax rate rose from 11 percent to 15 percent on November 1.

The tax hike was approved on May 2, 2016, and the Government on May 1 agreed to expand the scope of the VAT to cover healthcare services. The Ministry of Finance has now said that 82 essential consumer goods are newly exempt from tax as a result of the headline tax rate hike.

Earlier the territory had looked at instead introducing a split-rate regime. Previously the Budget had included proposals to replace the eleven percent rate with three rates: a zero rate on exported goods and the provision of services for consideration in foreign currency outside of Sri Lanka; a 12.5 percent rate on the services sector; and an eight percent rate on the manufacturing sector and on imported goods.

TAGS: Finance | VAT rates | tax | value added tax (VAT) | Sri Lanka | manufacturing | currency | services | VAT goods & services classification

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