The Ceylon Electricity Board (CEB) has clarified that the value-added tax (VAT) rate increase which was implemented from Monday (1) will have no impact on electricity tariffs, The Daily Morning learns.

On an earlier occasion, the CEB stated that it was awaiting a clarification from relevant institutions including the Ministry of Finance, Economic Stabilisation, and National Policies and the general Treasury as to whether the VAT revision would affect electricity tariffs.

Speaking to The Daily Morning yesterday (3), the CEB’s media spokesman, engineer Noel Priyantha said that while they had not yet received such a clarification, what had previously been informed to them was that the VAT increase would not be applicable to electricity tariffs. “In general, what they (the Finance Ministry and the Treasury) said was that the VAT increase would not affect charges for electricity.”

However, electricity tariffs are likely to be revised by late this month (January) with the CEB preparing a tariff revision proposal to be forwarded to the Public Utilities Commission of Sri Lanka (PUCSL), seeking their approval for the same. Priyantha, on an earlier occasion, said that the relevant proposal would be referred to the PUCSL on or before 15 January, and that the possible tariff revision is more likely to be a reduction in charges.

The Budget 2024, presented to Parliament by President and Finance, Economic Stabilisation, and National Policies Minister Ranil Wickremesinghe, stated that the VAT rate would be increased from 15% to 18% – by 3% – in January this year, along with the elimination of VAT exemptions other than for products related to the health and education sectors, and a few essential commodities.