The Value Added Tax (VAT) on imported fabric has been reduced to 5% from 15% upon the request of the fabric and garment industry. The Minister of Finance and Mass Media Mangala Samaraweera signed the gazette notification in this regard today, the Ministry announced in a statement. Earlier, fabric imports were subject to Rs. 100/kg CESS at the time of import. Budget 2108 had proposed to impose a 15% VAT on goods and the Value Added Tax Act No 14 of 2002 was amended accordingly, and the new VAT scheme came into effect on August 16. As fabric was also subject to this 15% VAT, the importers, traders and industrialists engaged in using fabric as raw material for making readymade garments had appealed to Samaraweera to provide them some relief as small scale traders and industrialists who are not covered under VAT Act have the adverse effect. The Minister made this decision to amend the VAT act further to reduce the VAT on imported fabric to 5% considering the possibility of giving a helping hand to proposed small scale industrialists under the ‘Enterprise Sri Lanka’ scheme, the subsidized loan scheme introduced by the Ministry. The scheme offers an interest subsidised loan scheme for medium and small-scale manufacturing industrialists to obtain fabric, as raw material, at a low cost.