Parliament passes VAT (Amendment) Bill

The Third Reading of the Value Added Tax (Amendment) Bill was passed in Parliament with amendments on Monday evening (11 Dec.).

The Bill was passed with a majority of 45 votes, with 100 MPs voting in favour, and 55 voting against the Bill.

Accordingly, the House approved a hike in VAT up to 18% from the current 15%, ahead of the International Monetary Fund (IMF) preparing to approve the second tranche of a $2.9 billion bailout for the crisis-hit country.

Earlier today, the Second Reading of the Bill was passed in Parliament with a majority of 57 votes.

A total of 98 MPs had voted in favour of the Bill, while 41, including former Minister and SLPP MP Roshan Ranasinghe and the opposition, had voted against it.

The debate on the Value Added Tax (Amendment) Bill commenced this evening (11 Dec.), after a proposal to debate the Value Added Tax (Amendment) Bill was passed in Parliament earlier today.

The Bill was initially scheduled to be taken up for debate on Sunday (10 Nov.), however, the parliamentary session was adjourned by Deputy Speaker Ajith Rajapakshe due to a lack of quorum.

The debate on the Second Reading of the Value-Added Tax (Amendment) Bill and the Finance Bill was taken up in the House last morning, during which State Minister of Finance Ranjith Siyambalapitiya said VAT would be imposed on 97 out of the 138 goods that were previously freed from the tax, in a bid to boost state revenue.

Speaking further, the State Minister said that Short Message Service (SMS) in fixed telephone networks will also be subjected to VAT, given the increased number of text messages sent.

However, medicines, equipment used by disabled persons, rice flour, wheat flour, vegetables, fruits, liquid milk, and the ‘Suwaseriya’ ambulance service will not be subjected to VAT, the state minister assured.