Sri Lanka

Sri Lanka finally implement VAT Changes

As of the 1st of November 2016 the VAT rate in Sri Lanka has risen from 11% to 15%. There has been a lot of confusion over the last few years as to what changes the Government were going to make, as they have announced several proposals previously that have fallen though at the eleventh hour see our previous post here – Will Sri Lanka implement an increased VAT rate?. This is one reason why it is essential to have an adaptable and manageable indirect tax solution.

With this standard VAT increase there have also been several other VAT changes implemented. A range of 81 basic foodstuffs and other products are now Zero-rated. These changes fall inline with the monetary programme set out by the IMF.

Will Sri Lanka implement increased VAT rate?

Sri Lanka’s Ministry of Finance have recently announced that they will be increasing the current VAT rate of 11% to 15% as of 2nd May 2016. This announcement causes some confusion and doubt as similar recent proposals have been scrapped at the 11th hour. In 2015 it was announced that from the 1st January 2016 the flat rate of 11% would be replaced by 3 different tax rates;

1. All Services to be subject to 12.5% VAT
2. All Goods to be subject to 8% VAT
3. The export of all Goods and Services for foreign currency receipt, subject to 0% VAT. Continue Reading