Value Added Tax (VAT)

Value Added Tax (VAT) [ Amendments to VAT Act No 14 of 2002]


(i)The present single rate will be revised to 3 bands.

0%, standard rate of 8% and higher rate of 12.5%.

– 0% for export of goods and provision of services for payment in foreign currency outside Sri Lanka

– Services sector – 12.5%

– Manufacturing or import of goods – 8% ( with the limitation of input tax )


(ii) The present exemptions on the Import or supply of telecom equipment or machinery, high-tech equipment including copper cables for telecom industry will be removed.


(iii) The wholesale and retail trade (other than by a manufacturer or importer) will be excluded from VAT


(iv) The present threshold will be revised to Rs 3 million per quarter or Rs 12 million per year.