Skip links

Sri Lanka confirms temporary VAT hike on financial services to 18% 2022

New tax hikes and levies on range of supplies confirmed by Parliament – 1 January 2022 implementation

The drop in revenues during the COVID-19 crisis has forced the government to propose a range of tax rises as the economy begins to recover. The country enjoyed 8% growth in the first half of 2021.

Sri Lanka’s has this week approved the raising of the Value Added Tax rate from 15% to 18% for 2022 only on banking and other nominated financial services institutions.  The standard rate for other supplies is 8% following a drop from 15% in 2019. Previously, the rate had been 11% until November 2016.

It will also introduce a new 2.5% Social Security Contribution turnover tax on businesses with a turnover over Rs 120millioin (approximately $600,000) per annum.

For regular free updates register for our global VAT and GST news.

A limited Goods and Services Tax (GST) will also be introduced from 1 January 2022 for the following supplies which already have industry-specific levies and taxes:

  • Gambling
  • Cigarettes
  • Alcohol
  • Motor vehicles
  • Telecoms services

VAT Calc’s in real-time global Calculator and Auditor  services produce instant and accurate tax calculations for Sri Lanka or any jurisdiction into your ERP, billing, e-commerce or e-invoicing systems.

Leave a comment