The Value Added Tax (Amendment) Bill to increase taxes on financial services from 15% to 18% was passed in Parliament today.
The Committee on Public Finance approved the proposal yesterday to be tabled in Parliament.
The relevant bill was prepared to implement the tax policy proposals mentioned in the Cabinet Paper dated the 14th of December 2021.
Accordingly, the VAT on the provision of financial services will be increased from 15% to 18% with effect from the 1st of January 2022.
Additionally, the amendment will provide for the exemption of VAT on medical equipment, machinery and pharmaceutical donations made to government hospitals and the Ministry of Health in the event of any epidemic or public emergency.
According to a statement issued by the Parliamentary Department of Communication, members of the Committee on Public Finance were of the view that a proper economic analysis should be done on any reduction or increase in the tax collection process in the country, going forward.