There must be no one who does not know that VAT was increased to 15% from the second day of May this year, which was 11%. It is not wrong to say that before the floods and landslides that buried hundreds of people caused by the heavy rains in the last few days, the attention of the media in the whole of Sri Lanka was focused on this VAT increase. The government is saying that the VAT has been increased in this way to cover the balance of payments deficit in Sri Lanka. The increase in the amount of loans taken, the fact that it was a year in which many loan installments had to be paid, and the economic upheavals that took place at the global level also led to this.
According to the statistics of Sri Lanka in 2015, it is stated that the amount of our public debt, that is, the total amount of debt that our country has to pay to other countries is 9.5 trillion rupees. That means 65.6 billion in dollars. The most alarming thing is that this is almost ¾ of our gross national product. (To be exact, 74.9% of the gross domestic product) No matter how you analyze it, this amount is a huge burden for a small country like us.
What
is VAT?
Vat comes from the English word VAT. Value Added Tax or value added tax is called VAT for short. (Some call this VAT, but it is not correct because the letter T is used for the word tax) VAT is an additional value added to the value of goods and services. That means that the government charges a certain percentage when you buy a product or get a service. Because of this, when people across the country engage in economic activities, the government gets additional income. Therefore, it can be said that this is used as a trick to increase the revenue of the government.
Why is
the government currently charging a VAT?
According to the Minister of State for Economic Affairs, it
is possible to significantly increase the state's income only through indirect
tax methods like VAT. , BOI Sri Lanka (Board of Investment Sri Lanka)
According to the Minister of State for Economic Affairs, it
is possible to significantly increase the state's income only through indirect
tax methods like VAT. , BOI Sri Lanka (Board of Investment Sri Lanka)
The Minister of State for Economic Affairs Mr. Lakshman Yapa
Abeywardena says this. "Due to various trends in the world economy, there
is a decrease in the income of our country. Examples of this include the
decrease in the demand for tea and rubber in the world market and the recent
devaluation of the rupee. Therefore, the only solution to maintain the
government's income at an adequate level is to use indirect tax methods like
VAT".
Sri Lanka Chamber of Commerce Chief Economic Analyst Anushka Wijesinghe opined that the main reason for the increase in VAT at the beginning of May was that Sri Lanka's tax system and expenditure control were delayed. If we had taken the right steps before, we would have had the opportunity to avoid this kind of problem without having to go through this kind of increase all at once.
What
kind of things do you have to pay VAT on?
An explanation of VAT.
An explanation of VAT.
In a discussion with Roar, Mr. Wijesinghe said that although
there has been a lot of talk about the recently increased VAT across the
country, not many people have paid attention to how the collected tax revenue
is used.
"Tax collection and public expenditure are like two sides of the same coin," he says; "Because the total expenditure of our country is higher than the total income, the government has to somehow increase its income. Because of this, the public has a fair right and a responsibility to find out and question what kind of things this additional income is being used for."
Water
bill
Engineer K. A. Ansar, chairman of the National Water Supply and Sewerage Board, says that due to the increase in VAT, there was a slight increase in the water bills. As it was learned in the discussion with Mr. Roar, 4% will be added to the total value of the water bills from this month. "That means if your water bill is 111 rupees, the total amount you have to pay will be 115 rupees. "Because even if your real bill is 100 rupees, you are already paying 111 rupees," he further explained.
Bottled
drinking water
Bottled drinking water is one of the products that you have
to pay an extra price for.
Bottled drinking water is one of the products that you have
to pay an extra price for.
We have come to know that the price of bottled drinking
water has increased significantly. For example, the price of a 500 ml bottle of
water, which was 30 rupees, has now become 50 rupees.
bus
fares
The Sri Lanka Private Bus Owners' Association has also issued an announcement that the bus fares will be increased by 8% in the July bus fare revision. However, they have emphasized that there will be no increase in bus fares until then.
Telephone
services and charges
According to the National Movement for Securing Consumer Rights, the VAT which was increased to 15% was added to telephone services, so there was a big change in the current tax. Also, the nation building tax was added to telephone services. Due to this, the telephone service tax is 26.04%, the nation building tax is 2.08%, and the VAT is 19.53%.
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