- Removal of Sri Lanka’s SVAT system has negatively impacted exporters by increasing cashflow needs and interest costs, discouraging backward integration.
- The apparel industry warns it may halt backward integration and investments due to the VAT on local inputs, making it harder to compete globally.
- Competing countries like Vietnam and Taiwan zero-rate sales to export firms, supporting local suppliers and exporters, unlike Sri Lanka’s current system.
- The Board of Investment is actively working with authorities to address the issue and has submitted a budget proposal to restore favorable VAT treatment for exporters.
- The removal of SVAT has also affected local buying offices and tea producers, with some sectors facing significant financial strain.
Source: economynext.com
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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