Govt. defers digital services VAT till April 2026

Sri Lanka
By Editor_1
-biometricupdate.com

COLOMBO – Sri Lanka has deferred the enforcement of a digital services tax, scheduled to come into effect on October 1, till April 2026, in order to iron out practical difficulties.

The VAT on digital services was part of an expansion of the tax based under an International Monetary Fund (IMF) program.

Cabinet spokesman Nalinda Jayatissa said the  delay has been  discussed with the IMF, noting that service providers had also requested form more time.

There have been concerns that the services like Paypal, and Stripe, which are financial facilitators, like credit cards, have also been listed for the 18% VAT.

Stripe is a service that collects funds from credit cards and bank accounts, for other service providers.

Paypal is a also a payment system that is connected to credit cards and bank accounts. If they are charged VAT on top of the underlying services, Sri Lankan customers may end up paying 36% VAT, financial experts have warned.

-economynext.com

Editor_1
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