Sri Lanka’s opposition leader Sajith Premadasa on Tuesday criticized the government’s decision to abolish the Simplified Value Added Tax (SVAT) scheme for exporters, warning that the move would damage the country’s foreign exchange earnings and undermine competitiveness.
Premadasa said in a post on X, formerly Twitter, that eliminating SVAT would tie up exporters’ capital, raise costs and make them less competitive in global markets. He urged the government to renegotiate its program with the International Monetary Fund rather than “blindly accepting” conditions that he said risk strangling the export sector.
The Inland Revenue Department announced this week that SVAT will end Oct. 1 and be replaced with a risk-based refund scheme. Under the new system, exporters and other eligible taxpayers will be categorized as low, medium or high risk, with refunds to be issued within 45 days depending on their risk rating.
Officials say the change is aimed at ensuring timely and efficient refunds while strengthening compliance. But exporters have warned the policy could trap their working capital and increase financing costs at a time when Sri Lanka is struggling to boost dollar inflows.
Premadasa said the government was “hurting the very people bringing in dollars” and cautioned the change would lead to “disaster” unless reversed. (Newswire)
Scrapping SVAT for exporters is a huge mistake. It ties up exporters’ capital, increases costs, and makes us less competitive. Instead of hurting the very people bringing in dollars, the govt should renegotiate with the IMF without blindly accepting their conditions. The fact is… pic.twitter.com/SFTVSj1yoS
— Sajith Premadasa (@sajithpremadasa) September 30, 2025