- The Committee on Public Finance (COPF) is requesting the Finance Ministry to reconsider VAT exemptions for medical equipment, agricultural items, and children’s foods.
- The Value Added Tax (Amendment) Bill aims to remove VAT exemptions on certain items and discontinue the Simplified VAT (SVAT) system.
- Agricultural machinery and equipment, including chemical fertilizer, will be VAT liable under the Bill.
- Agricultural seeds, plants, shrimp feed, and animal feed (excluding poultry feed) will be exempted from VAT.
- The Committee questions the rationale behind including VAT for agricultural items and its impact on the domestic agricultural and food industry.
- Dairy products such as liquid milk and eggs will also be liable for VAT, but wheat, wheat flour, powdered milk, pharmaceutical products, and drugs will be exempted.
- The Committee questions why food products made from grains cultivated in Sri Lanka and identified as high-protein agro foods are subjected to VAT, considering the rise in child malnourishment.
- The Committee urges the officials to reevaluate VAT exemptions for medical equipment, ambulances, fertilizer, and food products derived from high-protein agro foods and agricultural items.
- The elimination of VAT exemptions will not impact the fares of UBER and PickME, as they have already included VAT since their inception.
- The Committee also considered the Finance Bill to amend the Finance Act and the Imports and Exports Control Act.
- The Committee instructed the Ministry of Finance to submit a report on the provisions to release 119 imported vehicles yet to be cleared from customs.
- The Committee approved the Imports and Exports Control Act pertaining to the Gazette No. 2353/16.
- Several State Ministers and Members of Parliament were present at the Committee meeting.
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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.
