By Ranil asked to re-evaluate VAT; ANIL ASKED TO RE- Sri Lanka’s Parliamentary Committee on Public Finance (COPF) has requested the Finance Ministry to reevaluate value-added tax (VAT) exemptions for essential items like medical equipment, ambulances, high-protein agrofoods for children, and agricultural products.
The COPF’s directive came during a recent meeting on the Value Added Tax (Amendment) Bill, which seeks to eliminate VAT exemptions on certain goods and abolish the Simplified VAT (SVAT) system.
The Committee expressed concern about the potential impact of VAT on the domestic agricultural and food industries, noting that agricultural machinery, equipment, and chemical fertilizers, previously exempt from VAT, would now be subject to the tax.
While agricultural seeds, plants, shrimp feed, and animal feed (excluding poultry feed) would remain VAT-exempt, the Committee questioned the rationale behind imposing VAT on agricultural items, given the rising concerns over child malnutrition in Sri Lanka.
The Committee also raised concerns about the VAT implications for food products made from high-protein and high-energy grains cultivated in Sri Lanka, known as “Posha,” and for essential medical supplies like ambulances and equipment.
VAT Amendment Bill
After thoroughly reviewing the VAT Amendment Bill, the COPF granted approval, subject to the Finance Ministry incorporating the Committee’s proposed amendments. However, the Committee urged the ministry to reconsider VAT xemptions for medical equipment, ambulances, fertilizers, and high-protein agrofoods.
