Private health care services exempt from VAT

The imposition of a steep 15 per cent Value Added Tax (VAT) on private health care services is to be withdrawn on a directive issued by the President. The National Economic Council ( NCE) will take necessary action to exempt doctors’ consultancy fees, channelling fees and hospital charges from VAT for the benefit of the sick, official sources said.

At the 12th meeting of the NCE held recently, it has been revealed that majority of patients belonging to lower middle class have no option other than seeking health care facilities in private hospitals and medical centres.

This was due to overcrowding of government hospitals, a senior Health Ministry official said adding that the NCE will take a decision on the possibility of exempting VAT applicable for facilities provided by private hospitals.

President Maithripala Sirisena has also directed to safeguard local industrialists and businessmen, who are struggling to survive in the stagnated economy, an official said revealing that six main issues confronting those persons were also taken up for discussion at the meeting.

He emphasised the need of providing financial assistance for needy entrepreneurs and businessmen through stateowned commercial banks to keep their heads above water in the face of economic hardships, sources present at the meeting said.

The members of the council also discussed the after- effects of removing cess on imported ceramic sanitaryware that will lead to a virtual collapse of the local industry.

Under these circumstances, it has been decided to impose an import duty on ceramic sanitaryware similar to cess which has been removed to encourage imports hitting the local industry, he pointed out.

A proposal to revise the 24 per cent PAYEE tax on professionals and top private sector CEOs, senior managers and top executives has also been taken into consideration at the meeting.

But no decision was taken towards this end, the senior official said pointing out that the President has emphasised the need of revising the present PAYEE tax structure.

A high level of political and professional support should also be provided to plan, execute and manage huge national, short term, middle term, and long-term projects, as well as decisions to bring in the immediate changes needed for economic management, he told the NCE meeting.