LEGISLATION WATCH- Amended VAT Act to remove baked snacks, shower gel from list of VAT-exempt goods: The committee drawing up amendments to the VAT Act has reportedly agreed to impose the 14% VAT tax on baked snacks, crackers, and shower gel, instead of a 5% rate currently in place, the local press reports, quoting anonymous sources. Under the existing legislation, 57 goods and services are VAT-exempt. The exemptions include tea, sugar, milk, utilities, banking services, medicines and some health services. Some of those goods are, instead, subject to a separate variable rate referred to as the “schedule tax.”

We can expect to get more clarity on the VAT amendments within the next 2 weeks: The Finance Ministry has kept its cards close to its chest so far, revealing only that paper manufacturers may be in line for a tax exemption and that the changes would try to ensure that more registered taxpayers file VAT returns and pay their taxes.