- Sri Lanka’s VAT rate is set to increase to 18% next year
- Software and digital service providers will be affected by the VAT increase
- The government expects the VAT increase to generate significant revenue
- The estimated revenue from the VAT increase is around Rs. 227 billion
- Representatives of software and digital service providers have expressed concerns about the VAT hike
- Currently, these providers are exempt from VAT, but this exemption will be withdrawn from January 1, 2024
- Export-oriented providers will still be exempt from VAT
- The tax revenue from the VAT increase will be used for research on AI and other technologies
- The international standard for VAT on software and digital service providers is based on the authority of the consumer, not the jurisdiction of the business.
Source: sundaytimes.lk
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.
