GOVERNMENT HOPES TO FOCUS ON REDUCING THE VAT ON SCHOOL MATERIALS, ESSENTIAL FOODS AND MEDICINES
Senior Advisor to the President on Economic and Financial Affairs Prof. Anil Jayantha stated that the government will focus on reducing the VAT levied on school material including textbooks and essential foods and medicine.
The professor said this while participating in the meeting of Gampaha district farmers organised by Sri Lanka Agricultural Development Council, chairman Sashika De Silva, at Miriswatta yesterday (7).
The Gampaha Minsara organization President who attended the event said that Sri Lanka is known as the only country in the world that levies VAT on textbooks. Accordingly, he requested to remove VAT from school material.
Prof.Anil Jayantha in response said Sri Lanka has obtained an extended credit facility from the International Monetary Fund and have reached a series of agreements. Accordingly, it has been agreed to meet certain benchmarks. By 2025, the government’s income as a percentage of the gross domestic product has been targeted to increase to 15 percent.
“In order to achieve this goal, indirect taxes such as VAT should be collected. Exemption of school equipment from this tax should be studied very carefully. President Anura Kumara Dissanayake spoke about this during our discussion with the IMF. One suggestion was to reduce the percentage of VAT charged in this sector, which is currently 18%, to seven or five percent instead of 0%. Another suggestion was to give a financial grant to schoolchildren to buy equipment. But no final decision has been taken in that regard. It should be noted that as a policy, the government will take steps to reduce the VAT levied on essential food, medicine and school equipment to zero percent at the first possible opportunity,” he said.
