Opposition lawmakers from the Samagi Jana Balawegaya (SJB) staged a protest in parliament on Tuesday (9), adorned in black as a symbolic denunciation of the recent increase in the Value-Added Tax (VAT) and the escalating cost of living.
Led by party leader Sajith Premadasa, SJB MPs have been vocal in accusing the government of insensitivity to the struggles faced by ordinary citizens.
The recent elevation of Value-Added Tax (VAT) in Sri Lanka’s 2024 budget has raised concerns about its impact on essential goods, particularly affecting certain necessities.
The surge, from 15% to 18% on specific products and services, along with the reintroduction of VAT on previously untaxed items, has heightened apprehensions about the escalating financial burden on families already grappling with economic challenges.
In early January 204, Sri Lankan President Ranil Wickremesinghe defended the government’s decision to raise the Value Added Tax (VAT) from 15% to 18%, citing the nation’s dire economic situation and the imperative for fiscal consolidation.
The government’s move is rooted in a pivotal agreement with the International Monetary Fund (IMF). President Wickremesinghe emphasized that the agreement constrains the government from resorting to conventional means such as bank loans and printing money, which were previously relied upon for financing operations. This limitation prompted the exploration of alternative revenue-generating measures.
With the administration aiming to achieve a revenue equivalent to 12% of GDP this year, and an ultimate target of 15%, the VAT hike emerged as the primary avenue for bolstering government income, given the restrictions on traditional borrowing mechanisms.
