Health, housing, sugar, milk foods, hospitals and smart cellular phones exempt from...

Health, housing, sugar, milk foods, hospitals and smart cellular phones exempt from VAT

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Health, Housing, Sugar, Milk foods, Hospitals and Smart mobile

phones will not come under VAT. This was revealed by Finance Minister Ravi Karunanayake presenting the VAT (Amendment) Bill to Parliament. VAT has been newly added to Posts, telephones, arrack and cigarettes. The Minister further said that 74 items have been released from VAT.
Minister Ravi Karunanayake said that the present Government had to face the repercussions of the debt issue, since taking over from the earlier administration. The country was moving towards an appalling economic situation since all debts were not revealed. The present Government is taking loans with a proper financial management. The Finance Minister said that before long, the 15 percent tax will be reduced. Although health was earlier included in the package, the Government considered it was not appropriate to do so. As such it was added to the tobacco exempting health from VAT. The tax is exempted from housing, hospitals, smart phones and cellular phones. But postal, telephone levies, arrack and cigarettes will come under VAT.
Parliamentarian Bandula Gunawardena said when he met the President and the Prime Minister, he told them that they would be submitting an amendment to the health sector and to accept it as it is unreasonable. The President and the Prime Minister said that it would be taken into consideration. The finance Minister assured to remove the clause from the Bill. The Parliamentarian said that they appreciate the move and are thankful to the Government in this respect.
Minister Kabir Hashim said that initially the tax came in the form of GST in 1998. It was twelve and a half percent. It was not introduced by the UNP. In 2002, under a UNP regime, it was converted into VAT levying 20 percent. For the first time wholesale and retail trade was brought under VAT by Mahinda Rajapaksa in 2013. The Minister said it was not a tax introduced by them. VAT was in place from the Mahinda Rajapaks regime and the present Government has done nothing new.