President Ranil Wickremesinghe declared in Parliament today (12) that the government has decided to impose 18% Value Added Tax (VAT) across all sectors, with the IT services sector to be affected from January 1, 2024. The President made this announcement during the budget debate for the Ministries of Technology and Investment Promotion.
President Wickremesinghe recalled that the income of individuals paid in foreign currency was previously exempt from income tax in the IT sector. He mentioned that services provided by entities like Pickme, Uber, and Daraz were not exempt from income tax or VAT, as they were considered outside the scope of the IT sector.
Despite industry concerns about the 18% VAT, the President urged support, emphasizing that it contributes to the country’s development. He highlighted the importance of focusing on artificial intelligence (AI) technology and announced plans for a new digital transformation agency. President Wickremesinghe also discussed the allocation of significant funds for AI technology research and the establishment of a Digital Technology and Innovation Council.
In addition to the IT sector, the President outlined plans for new universities focused on technology and science, including the affiliation of General Sir John Kotalawala University with two new universities in Kurunegala and Seethawaka. The President also mentioned discussions with India to establish a Chennai IIT campus in Sri Lanka and the revision of laws to facilitate non-government and foreign universities in technology and management.
President Wickremesinghe emphasized the transformative potential of these initiatives, calling for bipartisan support to create a scientific and technological revolution in the country. He provided insights into the government’s plans for attracting foreign investments, establishing an international trade center, and developing a financial city through the Port Commission Act.
In concluding his address, President Wickremesinghe expressed confidence in the support of both the government and opposition to implement these activities for the country’s progress.