The government has proposed removing Value Added Tax (VAT) on school exercise books, textbooks and several other printed educational materials under the 2027 Budget, in a move aimed at making educational resources more affordable.
According to the official Budget Speech released by Parliament, President Anura Kumara Dissanayake has proposed exempting exercise books, textbooks, dictionaries, encyclopaedias, children’s drawing and colouring books, educational publications and other printed books from VAT.
The proposal comes after printed books and other printed materials became subject to VAT in January 2024, while exercise books had been subject to VAT even before that date.
The President said the measure is intended to improve access to education, knowledge and reading by reducing the tax burden on essential educational materials.
Under the proposed amendments to the Value Added Tax Act, No. 14 of 2002, the exemption will cover the importation and supply of several categories of printed materials, including exercise books, printed books, dictionaries, encyclopaedias, children’s picture and colouring books, printed materials in single sheets and printed music.
The Budget also proposes changes to the VAT calculation method for cinema tickets.
Under the revised system, film producers, distributors, the National Film Corporation and cinema hall operators will be liable for VAT based on their respective shares of ticket revenue, rather than the full ticket value.
Meanwhile, the government has proposed removing existing VAT exemptions on Artemia eggs and coconut coir pith.
The Budget also includes measures to simplify VAT arrangements for newly registered exporters and introduce the Central Bank’s indicative exchange rate for calculating VAT on transactions denominated in foreign currencies.
According to the Budget’s revenue estimates, the proposed VAT revisions are expected to reduce government revenue by Rs. 2.975 billion, with implementation scheduled for April 2027.
The measures are among several proposed tax amendments outlined in the 2027 Budget Speech. (Newswire)