Govt. retains Rs. 60 Mn VAT threshold, drops planned reduction

Colombo, June 24 (Daily Mirror) - The government has decided to retain the current Rs. 60 million annual turnover threshold for Value Added Tax (VAT) and the Social Security Contribution Levy (SSCL), postponing a previously proposed reduction to Rs. 36 million that was scheduled to take effect from July 1.

The announcement was made in Parliament by Deputy Minister of Economic Development Nishantha Jayaweera, who confirmed that the lower threshold will not be implemented at this stage.

Under the withdrawn proposal, businesses earning above Rs. 36 million annually would have been required to register for VAT and SSCL. However, with the decision now reversed, only entities exceeding the existing Rs. 60 million threshold will remain liable for mandatory registration.

The Deputy Minister said the government had opted not to proceed with the revision at present, thereby maintaining the existing tax structure for small and medium-scale enterprises that would have been newly brought into the tax net.

“Going forward, the VAT threshold will remain at Rs. 60 million. However, even those below the threshold can voluntarily register for VAT if they wish,” Jayaweera told Parliament.