Sri Lanka compelled to consider VAT increase

Sri Lanka's Treasury Secretary, Mahinda Siriwardana, announced today that the Value Added Tax (VAT) rate may need to be increased from 18% to 20-21% to accommodate salary demands from public servants currently on strike. 

This statement was made during a meeting at the President’s Office, chaired by President Ranil Wickremesinghe, as reported by the President’s Media Division (PMD).

Despite this consideration, the government expressed reluctance to meet the salary demands immediately, citing the additional financial burden it would place on the public. President Wickremesinghe emphasized during the meeting that a salary increase for public servants this year is not feasible.

The PMD also reported that while the current demands cannot be met, the 2025 Budget will take into account recommendations from an expert committee addressing salary disparities in the public sector.