The Ministry of Finance has revealed that the Sri Lankan government sacrificed more than Rs. 240 billion in potential tax revenue during the first half of this year, primarily due to exemptions from Value Added Tax (VAT) and the Social Security Contribution Levy (SSCL) granted to certain businesses.
According to the official tax expenditure statement for 2024/2025, the total amount foregone from January to June for companies not covered by the Board of Investment, Port City, or Strategic Development Projects reached Rs. 243.8 billion.
The wholesale and retail sector accounted for the largest share of lost VAT revenue, with over Rs. 99.4 billion exempted. The electricity and gas sector also benefited, receiving Rs. 34.8 billion in VAT relief.
The report further revealed that total SSCL exemptions for the six-month period amounted to Rs. 61.7 billion, with the wholesale and retail sector again receiving the largest share at Rs. 20.2 billion.
The manufacturing sector was exempted from Rs. 9.9 billion in SSCL.
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