SL 2026 VAT Amendment

The provided document is a legislative bill designed to modify the Value Added Tax (VAT) Act, No. 14 of 2002 in Sri Lanka. Key provisions include a tax increase on financial services to 20.5% (Previously, 18% VAT + 2.5% SSCL) and the introduction of a specialized framework for the registration and taxation of digital services provided by non-resident entities. To broaden the tax base, the government plans to lower the registration threshold for businesses while mandating the use of secured point-of-sale (POS) machines to ensure transparent accounting. The bill also updates penalty structures and criminal proceedings to more effectively target fraudulent refund claims and tax evasion. Additionally, it establishes specific exemptions for strategic businesses and allows for the deduction of entertainment taxes in certain film-related services. These amendments overall aim to modernize tax collection and align the nation's fiscal policy with the evolving digital economy. #npp #cse #anurakumaradissanayake