Parliament approves increase in VAT to 18%

Wednesday, 3 April 2024 00:06 - - {{hitsCtrl.values.hits}}

The order proposing to increase the Value Added Tax (VAT) percentage from 15% to 18% was passed in Parliament with a majority of 36 votes.

During the Parliamentary session yesterday, a total of 55 Members of Parliament voted in favour of the VAT amendment, while 19 MPs voted against it, showcasing a clear majority in support of the proposal.

The decision comes after the issuance of a Gazette notification for the VAT amendment in January of this year, signalling the Government’s intention to revise the tax rate to address fiscal challenges and boosting revenue streams.

Proponents of the VAT hike argue that it is essential for meeting budgetary requirements and ensuring sustainable economic growth, especially amidst the backdrop of heightened fiscal pressures exacerbated by the ongoing economic crisis. On the other hand, critics express concerns about the potential ramifications of higher VAT rates on the cost-of-living and purchasing power, particularly for low and middle-income households already grappling with economic strains.