Tuesday May 05, 2026
Tuesday May 05, 2026
Tuesday, 5 May 2026 00:25 - - {{hitsCtrl.values.hits}}
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| Economic Development Deputy Minister Nishantha Jayaweera |
The Government yesterday said recent Value Added Tax (VAT) amendments are intended to simplify and streamline the tax structure on financial services, dismissing claims that the changes amount to a broad-based tax increase.
Economic Development Deputy Minister Nishantha Jayaweera said misleading claims emerged following an Extraordinary Gazette issued on 3 May, prompting the Government to issue an official clarification.
Jayaweera stressed that the 18% VAT rate applicable to general consumer goods and services remains unchanged, meaning the amendment will not affect retail prices or household spending.
He explained that the changes apply solely to financial services provided by banks and financial institutions. Previously, such services were subject to an 18% VAT alongside a separate 2.5% Social Security Contribution Levy (SSCL).
Under the new amendment, these two taxes have been consolidated into a single 20.5% tax rate.
According to the Deputy Minister, the move is aimed at improving administrative efficiency, increasing transparency, and simplifying tax calculations by replacing a dual tax structure with a single unified levy.
He said consumers had already been indirectly bearing both charges when using financial services, and the latest change simply combines the two components into one declared rate without imposing any additional financial burden.
Jayaweera added that the revised structure is expected to strengthen tax administration and enhance collection efficiency.
He urged the public to rely on official information and avoid being misled by what he described as false and politically motivated social media narratives.
