15 August 2017 12:02 am
Cabinet approval was granted this June to abolish SVAT on January 1, 2018 subject to parliamentary approval. The SVAT abolishment was originally scheduled to become effective from April 1, 2017.
Exporters have been pushing for the SVAT scheme to be retained until the electronic tax portal (RAMIS), which can instantaneously process taxes, becomes reliably operational, since claiming VAT refunds under the normal scheme causes delays, which in turn threatens company cash flows.
Former Finance Minister and recently resigned Foreign Minister Ravi Karunanayake had said that small firms were fraudulently utilizing the SVAT system and that the SVAT system will become defunct once RAMIS comes online on January 1, 2017. However, the RAMIS system is not yet fully operational.