Through the 2016 budget, the VAT tax of 11% was revised to a three tier system ranging from zero percent, 8% and 12 percent.
Accordingly, the Finance Ministry issuing a statement says, most essential items and services such as water, electricity and telecommunication will fall under the zero VAT system.
The statement further says that VAT cannot be charged from consumers for water, electricity and telecommunication services and so there cannot be a price hike on the three items.
The 2016 Budget proposals also reduced the 11% VAT rate to 8% for manufacturing and import of goods. Accordingly the Ministry of Finance saidprices of import goods would reduce in the near future.
