The National Water Supply and Drainage Board (NWSDB) of Sri Lanka has decided to levy 15% VAT (Value Added Tax) on water bills of less than 25 units a month as from July 1, 2008. More than 70% of the consumers who are in the low-income category consume less that 25 units of water. The new tax, it was said, would place an additional burden on their cost of living.
The NWSDB said it was compelled to levy VAT by the Inland Revenue Department’s recent demand to impose the tax on all consumer categories alike. Consequently the Water Board had to pay Rs. 300 million per year in tax arrears. It claimed it was not possible to absorb huge losses by granting VAT concessions.
The NWSDB also said the 10% VAT levied on those who consumed more than 25 units had been increased to 17%.
Source: The Sunday Leader, 31 Aug 2008