Health Minister Rajitha Senaratne said today the Value Added Tax (VAT) would be imposed only for nine months and that the government would take steps to provide relief to people by simplifying the VAT after nine months.
He said the VAT had to be imposed to pay back the loan amount of Rs.1.3 trillion that the previous government had obtained from various banks.
“The previous government had obtained State loans not through the Treasury but from State banks in other ways.
So the loan amount that the government had to pay back was Rs.1.3 trillion according to the International Monetary Fund (IMF).
That is why this VAT issue has arisen. It is a temporary issue. The World Bank has agreed to provide US$ 4.5 billion and Asian Development Bank has agreed to provide US$ 1.5 billion to pay back this loan amount,” he said.
Minister Senaratne expressed these views while participating at the Kalutara District State Services Sports Festival yesterday. He said the VAT Bill which was approved by the Cabinet today would have less impact on the people than the previous one. Mr. Senaratne said the budget for 2017 would be submitted to Parliament on November 10. (Ajith Siriwardana)