The Value Added Tax (VAT) wil be increased to 15 percent from May 2, the Finance Ministry announced today.

This announcement came days after the majority of the Sri Lankan people celebrated their traditional new year.

In another shock, the government said that the revised tax from 11 percent to 15 percent, will also affect the telecommunication and health sectors. These sectors were earlier exempted from VAT.

The Nation Building Tax (NBT) will remain unchanged at 2 percent.

However, the exemptions granted at present for the telecommunication service, supply of electricity, lubricants, supply of good or services to any specified projects other than on housing projects, will be removed with effect from May.

The increase of VAT was to come into effect on April 1. However, the government later announced that its implementation will not come into effect on that date.