The Cabinet of Ministers has decided to reduce the Value Added Tax (VAT) from 15% to 8%, says Prime Minister Mahinda Rajapaksa.

In the meantime, Co-Cabinet Spokesperson Minister Bandula Gunawardana said this VAT reduction will be in effect starting from the 1st of December.

The ceiling for VAT has been raised to Rs. 25 million turnover per month from existing Rs. 1 million, the Co-Cabinet Spokesman said further.

He stated this addressing the first press briefing to announce the Cabinet decisions of the new government this evening (27).

The decision to bring down the VAT was taken during the first meeting of the Cabinet of Ministers this held morning (27). The meeting, chaired by President Gotabaya Rajapaksa, took place at the Presidential Secretariat.

The cut on VAT was a leading election pledge in the manifesto launched by President Gotabaya Rajapaksa in view of the recently held presidential election.

Keeping in with the election promise, the new government’s Cabinet of Ministers has decided to reduce the VAT to 8%.

The VAT went up from 11% to 15% with effect from May 2nd, 2016.

The goods imported into Sri Lanka and goods and services supplied within the territorial limits of Sri Lanka are the subject matter of VAT.