Press briefing of Cabinet Decision taken on 2023-09-11

Committee Stage amendments of the Bill of Value Added Tax Act, No.14 of 2002

- Approval of the Cabinet has been granted to submit the Bill prepared by the Legal Draftsman in Parliament, to amend the Value Added Tax Act, No.14 of 2002 as well as the abolition of Simplified Value Added Tax (SVAT) System from 2024-01-01. Representations have been made by the relevant parties that if the Simplified Value Added Tax (SVAT) System is removed without having a robust value added refund system, it will create serious cash flow issues for the present registered persons under the SVAT system, especially the exporters. Therefore, it seems appropriate to phase out the Simplified Value Added Tax System, until a robust tax refund mechanism is established. Accordingly, the proposal made by the Hon. President in his capacity as the Minister of Finance, Economic Stabilization and National Policies to submit a proposal to revise the effective date of the relevant provisions relating to removal of the Simplified Value Added Tax System at the Committee Stage of the Value Added Tax (Amendment) Bill in Parliament, as 2025-04-01, was approved by the Cabinet.