The government of Sri Lanka has introduced Value-Added Tax (VAT) on water bills of less than 25 units a month. As more than 70% of consumers in the low-income category use less than 25 units of water a month, this new tax imposes an extra burden on their already limited budgets.

The National Water Supply and Drainage Board (NWSDB) says that it has been forced to impose the tax because the tax department has starting taxing all consumer categories alike. This was costing the NWSDB Rs.300 million (€ 2 million = US$ 2.8 million) a year. A spokesperson for the Board said that the 10% VAT levied on consumers who use more than 25 units a month has been increased to 17%.

Web site: National Water Supply and Drainage Board (NWSDB)

Related news: Uganda: stop Value Added Tax on water, Source Weekly, 01 Jun 2007

Source: The Sunday Leader, 31 Aug 2008

Tags: financing, south asia, water and livelihoods, water supply