Handicraft products will be exempted from Value Added Tax (VAT), the government said yesterday.

Media Minister Anura Priyadharshana Yapa, told the weekly Cabinet press briefing that the exemption which was approved by the Cabinet of Ministers on Wednesday, would give the declining handicrafts industry a boost and improve the overall economy of the indigenous handicrafts community.

The Memorandum seeking the VAT exemption, he said was presented by Rural Industries and Self Employment Promotion Minister S. B. Nawinna.

The Cabinet of Ministers, Yapa said also approved a Memorandum submitted by Plantation Industries Minister, D. M. Jayaratne, to expend money obtained from accumulated loan recoveries from an initial allocation by the Asian Development Bank and the Central Bank, to revitalize the Revolving Fund for replanting in tea smallholdings.