by Zacki Jabbar

The proposal to increase Value Added Tax from 11 to 15 percent would not be imposed on essential items, the government said yesterday.

Health Minister Rajitha Senaratne told the weekly post-Cabinet press briefing yesterday that there was no difference of opinion between President Maithripala Sirisena and Prime Minister

Ranil Wickremesinghe on maintaining welfare measures for the masses. No other government had provided so much relief to the people in such a short time, he said.

State Minister of Finance Lakshman Yapa Abeywardena said that, electricity and water would be exempted from Value Added Tax (VAT) while it would be imposed on the private health and education sectors with the exception of medicines. “The proposed four percent increase in VAT on water bills will not be proceeded with. The hike in VAT from 11 to 15 percent which is to become effective from May 2, would apply to telephone bills.”

The government in keeping with its election pledges would use VAT received from the private health and education sectors to develop the state health and educational institutions, he said.

Refuting Opposition allegations that State revenue had dropped Abeywardena said that a perusal of statistics would reveal an increase, but it was not sufficient to meet the welfare measures introduced in the interests of the poor.

He noted that the International Monetary Fund had not laid down any conditions to provide a USD 1.5 billion loan, but only called for the government’s development plans and that was the procedure it adopted worldwide.

Media Minister Gayantha Karunathillake said that the Cabinet of Ministers which met on Tuesday had appointed a Committee comprising President Maithripala Sirisena, Prime Minister Ranil Wickremesinghe, Finance Minister Ravi Karunanayake and Central Bank Governor Arjuna Mahendra to decide on financial matters.

Courtesy:The Island