Saturday Jan 24, 2026
Saturday Jan 24, 2026
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SLAEA Chairperson Rajitha Jayasuriya
By Charumini de Silva
Apparel exporters have welcomed early gains from the abolition of the Simplified VAT (SVAT) scheme and the transition to the Risk-Based Refund Scheme (RBRS), describing the timely release of VAT refunds as a positive and confidence-boosting development for the country’s largest export industry, while cautioning that consistency and deeper digital reform will be critical to sustaining momentum.
Sri Lanka Apparel Exporters Association (SLAEA) Chairperson Rajitha Jayasuriya said the removal of the SVAT from 1 October 2025 and its replacement with the RBRS marked a significant policy shift, particularly at a time when exporters remain under pressure from tight margins, global demand volatility, and high working capital costs. Under the new system, VAT refunds were to be processed within 45 days from the date of correct filing.
“Most qualified apparel exporters had already received VAT refunds for October and November 2025 well ahead of expectations. This is a very positive step and we commend the Inland Revenue Department (IRD) officials for delivering the timely refunds. This momentum must continue consistently and not be treated as a one-off improvement, as predictable cash flows are essential for exporters’ competitiveness,” she told the Daily FT.
She said a key milestone in the reform process was achieved before the end of 2025, when an apparel company successfully completed both non-live and live pilot testing of an application programing interface (API) linked to the Revenue Administration Management Information System (RAMIS).
The API-enabled data matching system was used to validate information previously submitted through physical filings, demonstrating the feasibility of automated verification and reduced manual intervention.
According to Jayasuriya, the successful pilot reflected strong collaboration between the IRD, the Presidential Task Force, and the apparel industry, with system performance during testing described as robust.
She said such cooperation showed that practical, technology-driven solutions could be implemented when policy intent and execution were aligned.
The SLAEA Chairperson acknowledged that significant work remains, particularly in extending the benefits of faster refunds to small and medium-sized enterprises (SMEs) and indirect exporters, areas which are still a work in progress.
Jayasuriya also expressed appreciation for the IRD’s openness to industry feedback and its efforts to address operational bottlenecks during the transition to the RBRS.
She singled out Treasury Secretary Dr. Harshana Suriyapperuma for his active involvement in accelerating refund processing and resolving system-level constraints, noting that early refunds were released ahead of predicted timelines.
She asserted the importance of maintaining this efficiency throughout the year, at least till a fully fiscalised e-invoicing framework is operational.
To further strengthen the system, she said the apparel industry has proposed fast-tracking the implementation of e-invoicing across the entire sector, including backward-integrated companies, to ensure seamless data capture and verification across the value chain.
Jayasuriya also raised concerns over value-based audits being applied irrespective of risk categorisation, particularly the practice of invoice-level checks for refunds exceeding Rs. 50 million, which she said ran counter to the original risk-based principles agreed under the RBRS.
“A genuinely risk-based, digitised, and low-intervention refund mechanism would not only improve compliance, but also enhance Sri Lanka’s reputation as a reliable sourcing destination at a time when global buyers are increasingly sensitive to lead times, transparency, and financial stability in supplier markets,” she added.
