The Cabinet has granted approval for an increase in the Value-Added Tax (VAT) rate from the current 15 percent to 18 percent, effective from January 1, 2024, Cabinet Spokesperson Minister Bandula Gunawardana said.
He explained that despite a more than 50 percent increase in tax income during the first nine months of 2023 compared to 2022, this revenue has not met the targets established by the International Monetary Fund (IMF).
Minister Gunawardana pointed out, "Sri Lanka has not yet received the second IMF tranche because we could not meet the revenue targets set by the IMF." This reasoning underlies the Cabinet's decision to approve the VAT increase proposed by President Ranil Wickremesinghe in his capacity as the Minister of Finance.
