15% VAT on channelling fees, surgeries to be removed

19 June 2018 05:12 pm

The Cabinet today approved to remove the 15% Value Added Tax (VAT) imposed on doctor’s fees, channelling fees and on surgeries at private hospitals with effect from July 1, Finance Minister Mangala Samaraweera said.

However, he said the tax on in-house medical charges would remain unchanged because they believed that if a patient could afford to obtain in-house medical care, then that patient is also capable of paying the tax.

Addressing a news briefing held at the Finance Ministry, Minister Samaraweera said, as a sensitive government, they realised that the 15% tax increase on health services at private hospitals was a burden to the people.

“The VAT increase came into effect from January 1, 2016. As an initial measure, Out-Patient Department (OPD) services were exempted from the tax increase. As a sensitive government, we understood that the average citizen also needs to make use of the facilities offered by private hospitals and that the taxes that were being charged was a big burden to them. Therefore, we removed the tax on a request made by Health Minister Rajitha Senaratne and on the instructions of the President and Prime Minister,” he said. (Lahiru Pothmulla)

Pix by Pradeep Pathirana