Inflation to escalate by 2.5 percent due to VAT increase: Siyambalapitiya

10 December 2023 12:05 pm Views - 961

BY AJITH SIRIWARDANA AND YOHAN PERERA

Parliament, Dec. 10 (Daily Mirror)- Claiming that the government was expecting Rs. 227 billion in state revenue from the increase of VAT from 15 percent to 18 percent, State Minister of Finance Ranjith Siyambalapitiya said today the inflation will also escalate by 2.5 percent as a result of the VAT increase.

He told Parliament that inflation was recorded as 3.4 percent last week and that the inflation will exceed 5 percent with the increase of 2.5 percent.

The Minister said 138 items had been exempted from VAT and that 97 items out of that will be subjected to VAT under the new Amendment.

He said VAT will be imposed on both petrol and diesel while the VAT exemption will continue on some items such as vegetables, fruits, rice flour and medicine.