On 8 March 2016, the Sri Lankan government announced plans to increase the value added tax (VAT) rate from 11% to 15%. This follows the reversal of a change from a single VAT rate to a 12.5% rate for services and an 8% rate for goods in January. In addition to the VAT increase, the government is also planning to reintroduce a capital gains tax, which has not applied in the country since 1987.
The plans are part of Sri Lanka's efforts to balance its budget and secure a potential loan agreemen…