Sri Lanka Deputy Minister Clarifies VAT Revision as Tax Simplification, Denies Increase

Deputy Minister of Economic Development, Nishantha Jayaweera, has issued a clarification regarding the gazette notification to revise Value Added Tax (VAT) effective July 1. He stated that reports circulating on social media about a VAT increase are entirely false. The revision is intended as a simplification of the tax system, aligning with government policy, by merging the existing VAT and the Social Security Contribution Levy (SSCL) into a single tax. Consequently, entities like banks and financial institutions, previously subject to 18% VAT and a 2.5% SSCL, will now pay a consolidated 20.5% VAT.