- Digitalisation Initiative: President Anura Kumara Disanayake emphasized the urgent need for the Inland Revenue Department (IRD) to strengthen and digitalise its operations to align with Sri Lanka’s strategic digital economy objectives for 2030 during a meeting with relevant officials.
- Focus on Revenue Administration Management: Discussions centered on improving the existing Revenue Administration Management Information System (RAMIS), identifying its shortcomings, and implementing technological solutions to enhance tax administration efficiency.
- Goals for Tax Improvement: Key objectives include reducing tax irregularities, simplifying the tax system, increasing transparency, and introducing Point of Sale (POS) machines, which will broaden the tax base and streamline the tax payment process for citizens.
Source President Office
Top 5 Sri Lanka VAT Updates in 2025
- VAT on Digital Services Starting October 1, 2025, VAT will apply to digital services supplied by non-resident providers via electronic platforms to Sri Lankan consumers.
- Abolition of Simplified VAT Scheme (SVAT) The SVAT regime will be replaced by a risk-based refund mechanism, offering refunds within 45 days for eligible exporters and strategic suppliers.
- Mandatory E-Filing From July 1, 2025, all VAT returns must be submitted electronically. Manual filing will require prior approval from the tax authority.
- New VAT Exemptions Introduced Effective April 11, 2025, exemptions now apply to:
- Liquid milk and yogurt made from at least 50% locally sourced fresh milk
- Chemical naphtha supplied for electricity generation
- Removal of VAT Exemptions Imports of aircraft engines and spare parts will no longer be exempt from VAT, aligning with updated Harmonized System codes.
