New VAT Rate to Come into Operation From 1st November

The VAT amendment bill was passed with a majority of 53 votes with 76 members of parliament voting in favour and 23 voting against the bill yesterday .

Accordingly,  the VAT rate will be increased from 11 to 15%. However several goods and services have been exempted from VAT following the amendment.

Minister of Finance Ravi Karunanayake informed new VAT rate  will come into effect  as  from 1st of November 2016.

The Finance Minister said,  81 goods and services including wheat flour, bread, milk powder, rice, tea, coconuts, eggs, sugar, dhal and medicine are exempted from this  tax increase.

Further,  he said action will be taken against traders who increase prices of goods and services that are exempted from  VAT.