National Chamber of Exporters’ SVAT seminar on 3 July

The National Chamber of Exporters of Sri Lanka (NCE) will hold the third session of its high-demand seminar on the removal of the Simplified Value Added Tax (SVAT) system on 3 July 2025, at the BMICH.

This follows the successful completion of two previous sessions, which saw participation from over 300 exporters and industry professionals, highlighting the growing concerns within the export community.

This timely seminar is designed to address exporters’ concerns surrounding the SVAT removal and will feature two key presentations: KPMG Principal – Tax and Regulatory Suresh Perera, who will provide deep insights into the legal, regulatory, and financial impact of SVAT abolition and

Inland Revenue Department (IRD) Commissioner – Risk Management Unit Priyanka Dissabandara, who will deliver a detailed presentation on the new risk-based VAT refund system and the required registration process for exporters.

Key topics to be covered include Understanding the impact of SVAT abolition and exploring alternative tax mechanisms; How to stay compliant with the new government tax policies; Step-by-step guidance on navigating the IRD registration process for exporters and Preparing for the risk-based VAT refund system and managing potential cash flow challenges.

NCE said the Government’s decision to remove SVAT has caused considerable unease among exporters, especially at a time when they are already burdened by new U.S. tariffs, rising fuel prices, and the recent hike in electricity tariffs—all of which have increased operational costs and threatened export competitiveness.

The SVAT system was originally introduced to resolve major issues in the traditional VAT framework, particularly for exporters. By deferring VAT payments and reducing administrative burdens, SVAT has played a crucial role in improving cash flow, lowering operational costs, and enhancing global competitiveness. Its removal threatens to reverse these gains—tying up working capital, increasing compliance burdens, and creating financial uncertainty, especially for SMEs.

Moreover, exporters remain a cornerstone of Sri Lanka’s economy, playing a vital role in achieving the Government’s ambitious $19 billion export target. The sector is already grappling with challenges including volatile global demand, stiff international competition, and local operational constraints. Removing SVAT without a proven and reliable refund mechanism risks amplifying these pressures.

Although the Government intends to shift to a digital, risk-based VAT refund system, the NCE stresses the importance of rigorous testing to ensure it functions smoothly from the outset. While the Chamber supports the Government’s vision of a digital economy, past experiences have shown that refund mechanisms can result in years-long delays and excessive paperwork, placing a severe strain on exporter cash flows. In many cases, businesses have been forced to resort to high-interest bank loans to meet export orders, further increasing their cost base.

NCE President Indhra Kaushal Rajapaksa said: “Sri Lankan exporters are already navigating a tough global environment. The sudden removal of SVAT risks cash flow instability, pushing businesses to borrow to finance operations—something many cannot afford. We urge the Government to implement a tested and efficient refund system before removing a scheme that worked for exporters.”

Secretary General/CEO Shiham Marikar said: “This seminar is part of our ongoing commitment to keeping exporters informed and equipped. We are also proactively engaging with government stakeholders to ensure that any policy shifts do not negatively impact the long-term sustainability and competitiveness of our members.”