November 08, Colombo (LNW): Senior Advisor to the President on Economic and Financial Affairs, Prof. Anil Jayantha, announced that the government is considering reducing the VAT on school materials, including textbooks, as well as essential foods and medicines. This statement was made during a meeting with Gampaha district farmers, organized by the Sri Lanka Agricultural Development Council, on November 7.
A key issue raised during the meeting was Sri Lanka’s unique position as the only country to levy VAT on textbooks. The President of the Gampaha Minsara organization urged the government to remove VAT from school materials. Prof. Jayantha responded by emphasizing that while the government is committed to addressing these concerns, the country has committed to certain benchmarks with the International Monetary Fund (IMF), including a target to increase government revenue as a percentage of GDP to 15% by 2025.
To meet this goal, the government needs to collect indirect taxes like VAT. Prof. Jayantha mentioned that discussions with the IMF included suggestions such as reducing VAT on school materials from the current 18% to 7% or even 5%, rather than completely removing it. Another proposal was to provide financial grants to schoolchildren to purchase necessary materials. While no final decision has been made, the government aims to reduce VAT on essential items like food, medicine, and school materials to zero percent at the earliest opportunity.
