Sri Lanka Updates VAT Exemptions in 2024: Complete List and Key Highlights

• The Inland Revenue Department of Sri Lanka has updated the list of goods and services exempted from VAT starting in 2024.
• Essential food items like wheat, wheat flour, and infant milk powder will remain VAT-exempt.
• Healthcare services and medications will continue to be VAT-free, except for hospital room charges.
• Financial services such as bank accounts, loans, and insurance will stay exempt from VAT.
• Import duty waivers are provided for certain products like aircraft parts and goods for government infrastructure projects funded by foreign loans.
• Exports, education, and public transportation will remain zero-rated for VAT.
• The aim of the update is to optimize VAT collections while minimizing the impact on low-income groups.
• These changes come amidst a rising cost of living and a widening budget deficit in Sri Lanka.
• The new VAT rules follow an increase in VAT from 15% to 18% in Sri Lanka.

Source: lankabusinessonline.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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