- Sri Lanka’s parliament has approved a hike in value-added tax (VAT) from 15% to 18%.
- The increase is being implemented ahead of the International Monetary Fund (IMF) approving the second tranche of a $2.9 billion bailout for Sri Lanka.
- The VAT hike will take effect from January 1, 2024, and will include items such as fuel, fertiliser, and cooking gas.
- The government expects the increase to generate about 378 billion rupees ($1.1 billion) in revenue.
- Sri Lanka is recovering from a severe financial crisis and is awaiting the IMF’s first review on December 12.
- The VAT increase will boost the government’s tax revenue to 12.5% of GDP next year.
- The government aims to increase revenue to 15% of GDP by 2025.
- Implementing this revenue measure is seen as essential for Sri Lanka to overcome its current economic challenges.
Source: channelnewsasia.com
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.
