The Value Added Tax (VAT) and the Nation Building Tax which were passed in parliament on October 26, 2016 will be effective from November 1.  Accordingly, prevailing 11% VAT will be increased upto 15%.

The VAT registration ceilings for a quarter and a year on retail and wholesale trading will remain at Rs.12.5 million or Rs.50 million respectively. The VAT registration limit for other goods and services will be Rs.3 million a quarteror Rs.12 million per year.

According to the new Amendment, the existing 2% Nation Building Tax will remain unchanged.  However, the turnover limit to charge Nation Building Tax has been changed.  The existing limit per quarter Rs.3.75 million has been reduced to Rs.3 million.

Nation Building Tax will also apply to telephone services and electricity as well.  However, this will not affect the electricity bill.