• The amendment will provide for the exemption of VAT only on medical equipment, machinery and pharmaceutical donations made to Government Hospitals and the Ministry of Health in the event of any epidemic or public emergency

 By Yohan Perera and Ajith Siriwardana

The Bill to amend the Value Added Tax Act No. 14 of 2002 was approved by the Committee on Public Finance yesterday thus giving the green light to take it for debate today, Parliament communications unit said.

This Bill has been prepared to implement the tax policy proposals mentioned in the Cabinet Paper No. MF / FP / 32 / CM / 2021/212 dated 14th December 2021.

Accordingly, the Value Added Tax on the provision of financial services will be increased from 15% to 18% with effect from 1 January 2022. In addition, this amendment will provide for the exemption of VAT only on medical equipment, machinery and pharmaceutical donations made to Government Hospitals and the Ministry of Health in the event of any epidemic or public emergency.Members of the Committee on Public Finance were of the view that a proper economic analysis should be done on any reduction or increase in the tax collection process in the country.

The Committee on Public Finance also approved the Agreement between the Government of the Democratic Socialist Republic of Sri Lanka and the Government of the Republic of Turkey for the avoidance of double taxation and prevention of tax evasion with respect to taxes on income. State Ministers Nalaka Godahewa,  Kanchana Wijesekera, Members of Parliament  Dilan Perera, Professor Ranjith Bandara,  Nalin Fernando,  Harsha de Silva, Suren Raghavan, Mujibur Rahman, Hon. Isuru Dodangoda and a group of officials from the Ministry of Finance participated in the meeting.