Sri Lanka Approves VAT Hike to 18% Ahead of IMF Review to Boost Government Revenue

• Sri Lanka’s parliament has approved a hike in value-added tax (VAT) from 15% to 18%.
• The increase is part of the country’s efforts to meet targets set by the International Monetary Fund (IMF) for a bailout.
• The VAT hike is expected to generate about 378 billion rupees (US$1.1 billion) in government revenue.
• Sri Lanka is recovering from a severe financial crisis and is awaiting the finalization of its first review from the IMF.
• The increase in VAT will boost the government’s tax revenue to 12.5% of GDP next year.
• Inflation is expected to spike by 2% after the tax increase is implemented.

Source: todayonline.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.

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