Lower income families will be worst hit by VAT rise - Sunday Times

A study by Sri Lanka's Sunday Times has found that low and middle income households will be worst hit by the government’s move to raise Value Added Tax (VAT) to 15 percent from May 2.

Telephone, water and electricity bills are due to rise, on top of an increase on consumer items, medical bills and private education.

The budget 2016 had proposed a two-band VAT rate – 8 and 12.5 percent instead of a single rate of 11 percent, which however, not implemented.
The study said that an average low income or middle class family may incur an expenditure of about Rs 10,000 or more, taking into consideration the rising costs of various items besides the increase in phone, water and electricity bills, the paper said on Sunday.