Govt. widens the net by reducing annual VAT threshold to Rs. 60 m

Wednesday, 13 December 2023 00:28 - - {{hitsCtrl.values.hits}}

Cabinet Co-spokesman Minister Bandula Gunawardena shows off the new VAT list to the media yesterday

The Cabinet of Ministers on Monday approved the reduction in the annual Value Added Tax (VAT) threshold to Rs. 60 million from Rs. 80 million in a bid to widen the net.

The reduction in threshold for VAT registration comes hot on the heels of Government increasing the VAT rate by 20% from 15% to 18% effective 1 January 2024.

The Cabinet approved publication of the draft Value Added Tax (Amendment) Bill in the Government gazette and submitted it to the Parliament for approval.

The drafted bill, incorporating necessary revisions, has received the clearance of the Attorney General, signifying legal diligence in the amendment process. The bill aims to address economic dynamics and enhance revenue streams for the Government,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing yesterday.

On 30 October, the Cabinet approved changes to both the registration threshold and the VAT rate.

The resolution furnished by President Ranil Wickremesinghe in his capacity as the Finance Economic Stabilisation and National Policies Minister was approved by the Cabinet of Ministers on Monday.