The National Water Supply and Drainage Board (NWSDB) yesterday (31 December) said that water tariffs will be increased by 3% from today (1 January), as a result of the Government’s policy decision to increase the Value Added Tax (VAT) from 15 % to 18 % this year. 

When contacted by The Daily Morning yesterday (31 December), NWSDB Chairman Nishantha Ranatunga said that the decision will be followed by the recent VAT increase which is a regulation imposed by the Government, therefore the water tariff will automatically be increased by 3% as per the said decision.

When he was queried as to how long the increment will be in effect, the Chairman said that he is unaware of when the amount will decrease, and that the NWSDB will await instructions from the Government to decide.

However, recently, Minister of Water Supply and Estate Infrastructure Development Jeevan Thondaman, emphasised that there are no plans to increase the water tariffs, instead, the Ministry is diligently working on implementing a new water tariff formula set to roll out in January 2024.

The VAT (Amendment) Bill was passed in the parliament on 11 December (2023) by a majority of 45 votes, with 100 MPs voting in favour, and 55 voting against it. The Bill subsequently came into effect as the VAT (Amendment) Act No.32 of 2023. Accordingly, a hike in VAT up to 18% from the current 15% had been green-lighted.