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Ravi questions SVAT abolition, warns of export sector risks
Colombo, July 24 (Daily Mirror) - UNP MP Ravi Karunanayake yesterday (23) questioned the government’s decision to abolish the Simplified VAT (SVAT) scheme from October 1, 2025, warning that the move could severely affect Sri Lanka’s export sector.
Raising the issue in Parliament, Karunanayake said the SVAT system has been crucial in supporting exporters with cash flow, and its removal—reportedly linked to IMF policy directives—comes at a critical time for the economy.
He expressed concern over the proposed 45-day VAT refund mechanism, citing exporters’ lack of trust in the Inland Revenue Department (IRD) due to historical refund delays.
He also highlighted external pressures such as new U.S. tariffs, warning that the combined impact could reduce Sri Lanka’s export competitiveness and lead to business closures.
As such, Karunanayake called on the Finance Minister to clarify the rationale behind the move, detail safeguards to ensure timely refunds, and explain whether a tested refund system is in place.
He also urged the government to consider interim financial support for exporters and table the IMF’s recommendations and the official transition plan in Parliament.
He stressed that without a reliable refund system, the policy shift could trigger liquidity crises across the export supply chain, undermining Sri Lanka’s economic recovery.
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