The government has underscored the advantages available to Small and Medium-sized Enterprises (SMEs) that voluntarily register for Value Added Tax (VAT), even if their annual turnover is below the Rs. 60 million threshold.

Deputy Minister of Economic Development Nishantha Jayaweera, speaking to the media, said VAT-registered SMEs, particularly manufacturers, can claim input VAT on raw materials and certain services.

He noted that such businesses can also expand by attracting customers who prefer dealing with suppliers that issue VAT invoices.

“By registering, SMEs not only benefit from input VAT but also attract more customers, as buyers prefer to deal with traders who issue VAT invoices,” he said.

The Deputy Minister added that businesses are allowed to register for VAT voluntarily, regardless of turnover, and that this option strengthens competitiveness and supports SME expansion.

Jayaweera further explained that the government’s decision to keep the VAT threshold unchanged at Rs. 60 million, instead of reducing it to Rs. 36 million, was taken after considering the economic impact of Cyclone Ditwah last year and the Middle East crisis, which drove up fuel costs and commodity prices.

He stressed that while the move protects smaller businesses from additional tax burdens, voluntary VAT registration remains a strategic pathway for SMEs to grow and integrate more effectively into the formal economy. (Newswire)

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Deputy Minister of Economic Development, Nishantha Jayaweera, has announced that the budget proposal to reduce the annual turnover threshold for Value Added Tax (VAT) and the Social Security Contribution Levy (SSCL) from Rs.60 million to Rs.36 million will not be implemented.

The proposal to reduce the annual turnover threshold from Rs.60 million to Rs.36 million was to come into effect from July 1.

“We are removing this proposal after receiving the relevant clearance from the Cabinet of Ministers and the Attorney General, as well as the recommendations of the Parliamentary Consultative Committee,” he said, addressing Parliament today (23).

Deputy Minister of Economic Development, Nishantha Jayaweera, further questioned why the Opposition was opposing the move when they themselves called for such taxes. (Newswire)

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National People’s Power member Nishantha Jayaweera was sworn in as a Member of Parliament before Speaker Jagath Wickramaratne in Parliament today.

Nishantha Jayaweera was sworn in as a National List MP representing the National People’s Power. 

He fills the vacancy created by the resignation of former MP Harshana Suriyapperuma. (Newswire)

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