Senior Presidential Adviser on Economic and Financial Affairs, Professor Anil Jayantha, emphasized the importance of tax collection, including VAT, to achieve Sri Lanka’s revenue targets set in its agreement with the International Monetary Fund (IMF). Speaking at the Gampaha District Entrepreneurs’ Meeting, organized by Sri Lanka Industrial Development Council Chairperson Mrs. Sashika De Silva, Jayantha addressed concerns around VAT on essential items, especially school supplies.
The government aims to reduce VAT on essential goods, including food, medicines, and school equipment, to zero percent. The Gampaha Minsara Movement president pointed out that Sri Lanka is unique in taxing books with VAT, urging its removal from school items. Jayantha acknowledged this concern, explaining that while exemptions are being considered, meeting the IMF’s revenue benchmark is essential.
As part of the IMF’s extended credit facility, Sri Lanka has committed to raising government revenue to 15% of GDP by 2025. To meet this goal, indirect taxes like VAT play a crucial role. Jayantha noted that while full VAT exemption for school equipment is under review, alternatives such as lowering VAT from the current 18% to 7% or 5%, or providing financial grants to assist with school purchases, are also being considered.
President Anura Kumara Dissanayake has engaged with IMF officials on potential VAT adjustments, with the goal of prioritizing essential items. Jayantha assured attendees that the government will work to reduce VAT on non-essential food items, medicines, and school supplies at the earliest opportunity, balancing revenue needs with cost-of-living relief.
The event also featured remarks from Gampaha District Parliamentary candidate Mahinda Jayasinghe, Chairperson Sashika De Silva, and local entrepreneurs.
