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VAT revenue collection: Maldives highest, Sri Lanka lowest
Sri Lanka has the lowest tax revenue collected through Value Added Tax (VAT) in South Asia while Maldives with a lower tax rate collects nearly 5 times more through its Goods and Services Tax (GST). In 2023, Sri Lanka’s VAT rate was 15%, which generated LKR 694 billion—equivalent to 2.5% of GDP—making it the lowest in South Asia. In contrast, countries with similar or lower VAT rates collected higher revenue. For example, Bangladesh, with a similar rate, collected revenue amounting to 3.6% of GDP, and Nepal, with a lower rate of 13%, generated 5.3% of its GDP from VAT in 2023. The Maldives stands out with a Goods and Services Tax (GST) that raises revenue amounting to 12% of GDP, despite having a lower average rate of about 12% (8% for general GST and 16% for tourism GST). Although it is termed “GST,” the system functions similarly to Sri Lanka’s VAT by allowing businesses to charge GST on sales (output tax) and claim credits for GST paid on purchases (input tax). Although the reported value of goods taxed under General GST and the Tourism GST rate is about the same, the Maldives secures twice as much revenue from its Tourism GST due to the higher 16% rate.
Featured Insight
VAT revenue collection: Maldives highest, Sri Lanka lowest
Sri Lanka has the lowest tax revenue collected through Value Added Tax (VAT) in South Asia while Maldives with a lower tax rate collects nearly 5 times more through its Goods and Services Tax (GST). In 2023, Sri Lanka’s VAT rate was 15%, which generated LKR 694 billion—equivalent to 2.5% of GDP—making it the lowest in South Asia. In contrast, countries with similar or lower VAT rates collected higher revenue. For example, Bangladesh, with a similar rate, collected revenue amounting to 3.6% of GDP, and Nepal, with a lower rate of 13%, generated 5.3% of its GDP from VAT in 2023. The Maldives stands out with a Goods and Services Tax (GST) that raises revenue amounting to 12% of GDP, despite having a lower average rate of about 12% (8% for general GST and 16% for tourism GST). Although it is termed “GST,” the system functions similarly to Sri Lanka’s VAT by allowing businesses to charge GST on sales (output tax) and claim credits for GST paid on purchases (input tax). Although the reported value of goods taxed under General GST and the Tourism GST rate is about the same, the Maldives secures twice as much revenue from its Tourism GST due to the higher 16% rate.
Featured Insight
VAT revenue collection: Maldives highest, Sri Lanka lowest
Sri Lanka has the lowest tax revenue collected through Value Added Tax (VAT) in South Asia while Maldives with a lower tax rate collects nearly 5 times more through its Goods and Services Tax (GST). In 2023, Sri Lanka’s VAT rate was 15%, which generated LKR 694 billion—equivalent to 2.5% of GDP—making it the lowest in South Asia. In contrast, countries with similar or lower VAT rates collected higher revenue. For example, Bangladesh, with a similar rate, collected revenue amounting to 3.6% of GDP, and Nepal, with a lower rate of 13%, generated 5.3% of its GDP from VAT in 2023. The Maldives stands out with a Goods and Services Tax (GST) that raises revenue amounting to 12% of GDP, despite having a lower average rate of about 12% (8% for general GST and 16% for tourism GST). Although it is termed “GST,” the system functions similarly to Sri Lanka’s VAT by allowing businesses to charge GST on sales (output tax) and claim credits for GST paid on purchases (input tax). Although the reported value of goods taxed under General GST and the Tourism GST rate is about the same, the Maldives secures twice as much revenue from its Tourism GST due to the higher 16% rate.
Featured Insight
VAT revenue collection: Maldives highest, Sri Lanka lowest
Sri Lanka has the lowest tax revenue collected through Value Added Tax (VAT) in South Asia while Maldives with a lower tax rate collects nearly 5 times more through its Goods and Services Tax (GST). In 2023, Sri Lanka’s VAT rate was 15%, which generated LKR 694 billion—equivalent to 2.5% of GDP—making it the lowest in South Asia. In contrast, countries with similar or lower VAT rates collected higher revenue. For example, Bangladesh, with a similar rate, collected revenue amounting to 3.6% of GDP, and Nepal, with a lower rate of 13%, generated 5.3% of its GDP from VAT in 2023. The Maldives stands out with a Goods and Services Tax (GST) that raises revenue amounting to 12% of GDP, despite having a lower average rate of about 12% (8% for general GST and 16% for tourism GST). Although it is termed “GST,” the system functions similarly to Sri Lanka’s VAT by allowing businesses to charge GST on sales (output tax) and claim credits for GST paid on purchases (input tax). Although the reported value of goods taxed under General GST and the Tourism GST rate is about the same, the Maldives secures twice as much revenue from its Tourism GST due to the higher 16% rate.
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Sri Lanka moves closer to finalising debt restructuring with Japan
Sri Lanka’s Cabinet approved a debt restructuring agreement with JICA, following bipartisan negotiations and legal clearance, aiming to boost investor confidence and secure further international financial support....
2025-02-06
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Exporter dollar conversion and surrender rules bring in US$ 300mn monthly: CB
The Central Bank last week disclosed that it collects every month up to US$ 300 million from exporter dollar conversions and surrender requirements, which helps significantly to provide dollars to finance the essential imports such as fuel,...
2022-05-23
Daily Mirror
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New budget to replace 2022 current budget
Sri Lanka’s new administration headed by Prime Minister Ranil Wickremesinghe is gearing up to present a new, relief-based budget, around next month, replacing budget 2022 – for the first time in history since independence
2022-05-22
Sunday Times
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Sri Lanka succumbs to hard default
Sri Lanka yesterday succumbed to an embarrassing “hard default” as the grace period for the International Sovereign Bonds (ISB) Coupon payment lapsed.
2022-05-19
Daily FT
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Banks, finance and other companies requested to pay taxes upfront
The Inland Revenue Department (IRD) has called on large banks, finance companies and private sector companies to pay their first quarter taxes upfront, ahead of the due date, as the Government is facing a cash-flow problem in paying public s...
2022-05-15
Sunday Times
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