- The reduction of Sri Lanka’s VAT threshold from Rs. 60 million to Rs. 36 million will negatively impact MSMEs and low-income groups, increasing their tax burden and consumer prices.
- The move is expected to push many small retailers into the tax net, potentially causing consumers to shift to non-VAT businesses and creating economic imbalance.
- MSMEs are vital to Sri Lanka’s economy, contributing 52% to GDP and employing 4.5 million people, but many have already closed or are struggling due to recent crises.
- Access to finance remains a major issue for MSMEs, with over 60% listed as having non-performing loans, and government measures have not adequately addressed their challenges.
- Many MSMEs face liquidation, with a growing number of cases leading to a dedicated commercial high court for liquidations.
Source: sundaytimes.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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