Deputy Minister of Industries and Entrepreneurship Chathuranga Abeysinghe has urged entrepreneurs to embrace VAT registration and statutory compliance, arguing that formalisation is essential for business growth and long-term success.
In a statement, Abeysinghe said entrepreneurs should aspire to build businesses capable of competing globally and making a meaningful impact, while noting that those operating livelihood-based businesses may have different goals focused on maintaining a stable income.
He said that, regardless of existing thresholds and legal requirements, entrepreneurs should consider registering for VAT and complying with statutory obligations as part of building stronger and more credible businesses.
According to the Deputy Minister, formalisation encourages businesses to maintain proper financial records, engage professional expertise and improve their ability to access credit and investment opportunities.
Abeysinghe also pointed out that businesses not registered for VAT are unable to recover VAT paid on purchases such as raw materials, machinery and imported goods, effectively increasing their operating costs.
He stressed that all sales should be supported by valid tax invoices, noting that practices such as issuing “approval bills” are not recognised under Sri Lankan law.
The Deputy Minister said the government’s efforts to implement the new VAT framework would take time and require education and support for businesses transitioning into the formal economy.
At the same time, he said smaller livelihood-based businesses should continue to receive protection, adding that enterprises with annual turnovers around Rs. 36 million should be treated differently from businesses seeking to scale into larger operations generating hundreds of millions of rupees.
Abeysinghe said the Ministry of Industries would continue supporting formal businesses and helping them access international markets, with the broader goal of improving Sri Lanka’s business environment and competitiveness over the coming years. (Newswire)
Full Statement
If you are an entrepreneur
If you are an entrepreneur you are a change maker, your dreams should be big enough to conquer the world, make an Impact
If you are a livelihood business your aspirations should be to chill with a reasonable monthly Income
As Deputy Minister of Industries and as a person who genuinely support entrepreneurship, i believe all entrepreneurs should register for VAT and other statutory compliances in the country irrespective of thresholds and laws
The benifts for registration in a country that has VAT as tax is beyond explanations
Number one we all need formalized structure to grow, registrations with taxes will make you compelled to keep the numbers right, bring professionals in to business and make a strong business, make you credit worthy.
Every thing you purchase today, from Your raw materials, to machinary to imported gooda will carry VAT, and today you have no way to claim it back if not registered so it becomes a cost
Mind you, as per the law of the country there is no such things called “on approval bills” its absolutely illegal to sell anything with out a tax invoice. So its a matter of time ur illegal supply chain will be removed for good by this government. Also any item imported VAT is paid so you should demand a VAT invoice unless the supply is VAT exempt like medicine or rice
So this message is for entrepreneurs, who wanna make a change. So those who believe in change and fair playing field should support the government to build a fomal economy.
Its a journey, we have to start somewhere. As a responsible politician im keeping this record today so in 10 years from now, we will talk about a Singapore or a Europe standards business. Ease of doing business does not come over night. You need to make bold moves and make required changes.
The implementation of new VAT act will be tough and will take a while. We need to educate and support entrepreneurs to come onboard and we will need also to protect livelihood business. I personally think someone generating an annual turnover of 36 million is a strong livelihood business and we should let them be and focus on entrepreneurship who wanna make 360 million business that can connect to global value chains
Ministry of industry will drive support and foster formal businesses, and help them reach the world
Chathuranga Abeysinghe
Deputy Minister of Industries and Entrepreneurship