The Hon. Ravi Karunanayake

¶ 01 Thank you, Sir, and apologies for the delay due to a medical matter.

¶ 02 Under Standing Order 27(2), I draw attention to the proposed abolition of the Simplified Value Added Tax (SVAT) system in September 2025 without ensuring a guaranteed and efficient refund mechanism for exporters.

¶ 03 The Government projects export revenue of US$ 19 billion. Removing SVAT without a proper refund system will strain cash flows, discourage exports and create uncertainty among exporters, including SMEs. Lack of a swift, transparent refund mechanism will cause delays, raise costs and erode competitiveness in global markets. Our exporters already compete with peers who enjoy low capital costs and minimal administrative hassles. In a context of rising anti-globalization tendencies internationally, we must help our companies compete.

¶ 04 I ask the Minister of Finance: 1. What measures will ensure a timely and guaranteed VAT refund system before abolishing SVAT? 2. Given current refund “nightmares,” is this measure practical now? 3. Were key stakeholders—exporters, chambers of commerce and SME chambers—consulted? 4. How will adverse effects on exporters’ liquidity and competitiveness be mitigated while targeting US$ 19 billion in exports? 5. Will Government postpone abolishing SVAT until an efficient refund system is fully implemented and tested? 6. Despite State guarantees, commercial bank interest rates remain high versus international markets, making regional competition difficult. Why? 7. The Budget highlighted modernizing VAT collection and introducing devices; can we wait until that process functions? 8. While export growth is vital to exit the debt crisis, can we introduce expenditure-based tax relief to enhance export competitiveness and GDP growth, given exporters receive limited relief due to tax implementation and fiscal constraints? 9. What is the Government’s estimate of annual tax revenue lost through evasion? As this directly affects the export sector and macro stability, urgent clarification is requested.

¶ 05 Thank you, Hon. Deputy Speaker.