NBT, VAT relief proposed in budget from September

7 August 2019 12:01 am - 0     - {{hitsCtrl.values.hits}}

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  • NBT to be lifted on hotels registered with SLTDA if they receive payments through local banks
  • Importation of yachts and other vessels for pleasure or sport to be exempted from NBT
  • NBT exemption available for subcontractors in construction to be extended to main contractors 
  • VAT payment date to be shifted to 20th day of the month easing inconvenience to taxpayers, administration 
  • Exemption of VAT for apartments sold below Rs.25mn


The Cabinet of Ministers has approved the tax amendments proposed by Finance Minister Mangala Samaraweera in Budget 2019, and accordingly amendment draft bills on Nation Building Tax (NBT) and Value Added Tax (VAT) will be presented to Parliament for approval in September.


Under the new tax amendments, hotels, guest houses and restaurants registered with Sri Lanka Tourism Development Authority (SLTDA), which receive payment for their services in foreign currency through local commercial banks, will be exempted from NBT.


“This is aimed at strengthening the tourist industry,” the Finance Ministry said in a statement. 


At the same time, importation of yachts and other vessels for pleasure or sport purposes will also be exempted from NBT.


The Finance Ministry also said the NBT exemption currently available for subcontractors in the construction sector will be made available to the main contractors too.
In addition, this tax concession will be given to the importers of unprocessed gems on the recommendation of the National Gem and Jewellery Authority. 


The NBT exemption will also be extended to the palm oil manufactured locally out of imported crude palm oil. 


Meanwhile, VAT amendments will change VAT payment date to the 20th day of the month, minimizing the inconvenience to taxpayers as well as to the tax administration.
VAT payment dates presently fall on 15th, 20th and last day of the month following each month of a taxable period.


Also, the existing VAT on the supply of condominium housing units has been amended and VAT will not be charged from such housing projects which sell housing units not exceeding Rs.25 million each.


If a housing unit is provided by a condominium which had obtained a compliance certificate from the relevant local government authority or under an agreement of sale under the Notary Ordinance before the VAT Amendment Act was ratified, VAT will also not be charged for such property as well.


In addition, the locally produced rice bran oil manufactured out of locally produced red rice will also be exempted from VAT.


At the same time, as proposed by the Budget 2019, the existing VAT of Rs.75 per item of garments sold locally by Board of Investment-approved apparel companies has been increased to Rs.100 per item.

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