In a significant development, the Ports and Airports Development Levy (PAL) currently levied on fuel and gas is poised for elimination with the forthcoming implementation of the revised Value Added Tax (VAT). Advisor on Tax Policy to the Ministry of Finance, Thanuja Perera, elucidated that the 7.5% PAL on fuel and the 2.5% PAL imposed on Liquefied Petroleum (LP) gas will be rescinded when the augmented 18% VAT takes effect on January 1, 2024.
The legislative stride towards this alteration was marked by the successful passage of the VAT (Amendment) Bill in parliament on December 11, garnering a majority of 45 votes. Notably, 100 Members of Parliament voted in favor, while 55 voted against it. Consequently, the Bill has been enacted as the VAT (Amendment) Act No.32 of 2023, formalizing the sanctioned increase in VAT from the existing 15% to the newly approved 18%.
