- The Government of Sri Lanka will abolish the Simplified Value Added Tax (SVAT) system on October 1, 2025, reinstating the standard VAT mechanism and introducing a risk-based VAT refund system. SVAT, introduced in 2011 to combat VAT fraud and delays, allowed businesses to issue credit vouchers instead of cash payments. With its repeal, businesses must pay the full 18% VAT at purchase. Refunds will be based on a risk rating by the Inland Revenue Department, categorizing taxpayers into low, medium, and high risk, with varying verification requirements. All refunds will be processed within 45 days.
Source: english.newsfirst.lk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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