COLOMBO: The Sri Lankan government today presented the revised Value Added Tax Amendment Bill before Parliament.
Minister of Higher Education and Highways and the Leader of the House of Parliament Lakshman Kiriella moved the Bill entitled “Value Added Tax (Amendment)” to amend the Value Added Tax Act, No.14 of 2002. Minister Kiriella informed the House that the second reading of the Bill will be taken up in Parliament tomorrow.
The new amendment to the VAT Act, envisages imposition of 15% VAT, instead of the current 11 %. Under the new Act, only the wholesale and retail shops which exceed their daily turnover of Rs.138, 000 will be categorized as VAT payable merchants and VAT will not be charged on any essential item.
The government on the 2nd of May decided to increase the Value Added Tax rate from 11% to 15%. However, the Supreme Court on 11 July issued an interim order to suspend the VAT increase until the relevant legislation is passed by the parliament.
The apex court issued the interim order when it heard a petition filed by the Leader of the National Freedom Front and United People’s Freedom Alliance MP Wimal Weerawansa against the VAT increase. The However the Supreme Court issued an interim order preventing the government from implementing the 4 per cent revision to the Value Added Tax.
A new Bill was drafted based on the proposals agreed during the round of talks between the Finance Ministry and various groups including political parties. Sri Lanka’s Cabinet of Ministers at last month approved the Draft Bill.






