The government has decided to introduce a common goods and services tax instead of VAT.
The Cabinet paper presented by the Minister of Finance Basil Rajapaksa at the Cabinet meeting held yesterday has been approved.
Co-Cabinet Spokesman Minister Udaya Gammanpila has stated that steps will be taken to submit the relevant resolution to Parliament for approval.
The relevant Cabinet decision also states:
The 2021 and 2022 budgets proposed to impose single specialized goods and services tax that will be managed online in place of taxes and levies imposed under various statutory laws to increase the efficiency of tax collection on liquor, cigarettes, telecommunications, betting and gambling, and vehicles.
The 2022 budget also proposes to increase the value-added tax on financial services and to exempt medical equipment, accessories, and chemicals donated to government hospitals and the Ministry of Health provided under epidemic or public health conditions.
The Attorney General’s clearance has been received for the Special Goods and Services Tax Bill and the Value Added Tax (Amendment) Bill prepared for that purpose by the Legislature.
Accordingly, the proposal made by Hon. Minister of Finance, to proceed with the relevant activities, was approved by the Cabinet.
