- Sri Lanka will broaden its value-added tax (VAT) base and raise the headline rate to 18 percent.
- The VAT exemption will only apply to certain health and education services and a limited basket of foodstuffs.
- This is part of an austerity Budget being developed by the Government in negotiations with the International Monetary Fund.
- The standard rate increase is the third hike in two years, with previous increases in June 2022 and September 2022.
- The VAT rate increase, along with other measures such as corporate tax hikes, aims to address the country’s debt crisis.
- Sri Lanka had a record low tax-to-GDP ratio of 8.1 percent in 2020.
Source: answerconnect.cch.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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