The Value Added Tax (VAT) (Amendment) Bill to increase taxes on financial services from 15% to 18% was passed in Parliament yesterday.
The Committee on Public Finance approved the proposal on Wednesday to be tabled in Parliament.
The relevant bill was prepared to implement the tax policy proposals mentioned in the Cabinet Paper dated December 14 2021. Therefore, the VAT on the provision of financial services will be increased from 15% to 18% from January 1, 2022. Additionally, the Amendment will provide for the exemption of VAT on medical equipment, machinery and pharmaceutical donations made to government hospitals and the Health Ministry in the event of any epidemic or public emergency. According to a statement issued by the Parlia mentary 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.