- VAT will be increased from 15% to 18% starting from January 1, 2024
- The increased VAT will also be imposed on currently untaxed goods and services
- The government had taken steps to increase tax revenue, resulting in a 51% increase in tax revenue during the first nine months of 2023 compared to 2022
- The government failed to reach the tax collection targets recommended by the IMF, leading to a delay in the release of the second tranche of its loan
- Former President Gotabaya Rajapaksa had previously reduced the VAT from 15% to 8% in 2019, which was then increased to 15% in September 2022
- Sri Lanka collected approximately Rs 1,751 billion in taxes in 2022, with a total tax and non-tax revenue of Rs 1,979 billion
- Significant amounts were spent on salaries, pensions, and social welfare programs
- The Minister commented on state employees’ demand for a pay hike, stating that increasing salaries would require money from the people.
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.