The Cabinet of Ministers, at its meeting on Monday (11), has granted approval to reduce the Value-Added Tax (VAT) registration threshold.
As such, the VAT registration threshold is expected to be slashed from Rs.80 million per annum to Rs.60 million per annum with effect from 1 January 2024.
The Third Reading of the VAT (Amendment) Bill was passed with amendments in Parliament on Monday, by a majority of 45 votes, with 100 MPs voting for the Bill, and 55 voting against it.
Accordingly, the House had approved a hike in VAT up to 18% from the current 15%, ahead of the International Monetary Fund (IMF)’s preparations to approve the second tranche of a $2.9 billion bailout for the crisis-hit country.
Meanwhile, the Ceylon Chamber of Commerce (CCC) has raised concerns about the proposed increase of the VAT to 18%, emphasising that the move could lead to a further decline in consumption.