Business

JAAF calls on GoSL to urgently reconsider SVAT abolition

Published

2 years ago

2024/07/27

Inside a Sri Lankan apparel factory

With the countdown to the forthcoming abolition of the Simplified Value-Added Tax (SVAT) system ticking down to an end date of April 1, 2025, the apex body of the Sri Lankan apparel industry, the Joint Apparel Association Forum (JAAF) urged the government to urgently reconsider its decision in light of growing stresses on the industry, a press release said.

The release adds: “The apparel sector is currently grappling with significant challenges in the global market, which is already being reflected in reduced export figures. At such a time, the removal of SVAT without first establishing a viable and efficient refund mechanism is going to drastically disrupt cash flows for all exporters including the apparel industry, which makes up nearly half of the nation’s entire export portfolio. Failure to reconsider this policy will almost certainly exacerbate financial strain on the sector, and further erode Sri Lanka’s export competiveness as funds will inevitably be tied up in refund processes, even in the most efficient systems,” said Bandula Fernando, chairman, Sri Lanka Chamber of Garment Exporters – which represents the SME sector with JAAF.

‘While authorities have committed to “significantly speed up valid VAT refunds” the apparel industry has maintained its position that this commitment has not been met with no measurable improvements on time taken for refunds having been achieved as yet. According to Fernando, any decision to proceed with abolition of the SVAT scheme in the absence of any tangible progress on speeding up valid VAT refunds would be catastrophic, particularly for the SME sector.

“The SME sector is really struggling right now and if the removal of the SVAT system goes ahead this will be a major burden on the cash flows of the SME sector. Despite the law requiring for refunds to be made within 45 days, exporters have legitimate VAT refunds due as far back as 2010 and no interest is paid on these delayed refunds. In that time, the Sri Lankan rupee has lost 69% of its total value. Such inefficiencies will create insurmountable obstacles for SME apparel exporters, and severely erode cash flows even for larger players,” he noted.

‘Meanwhile, JAAF Secretary General, Yohan Lawrence stressed that JAAF and its members recognize and appreciate the government’s need to meet revenue targets as part of the IMF program However, he noted that the decision to remove the SVAT scheme had unfortunately been made on two incorrect assumptions, namely: that the current system creates revenue erosion and that the removal of SVAT would enhance the revenue collection for the state.

“This claim has not been substantiated in respect of the formal apparel sector where the SVAT system is used for the sourcing of intermediary goods for the manufacture of apparel. The industry has been on a journey of backward integration whereby supply of raw materials has moved away from being imported to being manufactured locally. Removal of the SVAT system will reverse this trend, leading to more imports,” Lawrence cautioned.

‘According to industry experts, the primary effect of abolishing SVAT would be increased cash flow between exporters and the IRD, and not increased revenue. Sri Lanka’s history with VAT refunds prior to SVAT was marked by significant delays, with refunds due for over 18 months, creating significant financial bottlenecks for exporters.

‘Historically, VAT refund systems have been prone to fraud, particularly in the non-export sector. The SVAT system effectively mitigates this risk by limiting the scope for abuse. Exporters, who utilize SVAT to purchase local inputs for conversion into export products, have minimal local sales, thus reducing potential misuse. Conversely, the likelihood of fraud is significantly higher in an inefficient payment and refund system compared to the voucher-based SVAT system.

‘Moreover, the reintroduction of a VAT refund system may compel apparel exporters to import raw materials rather than purchasing domestically. This shift would not only strain cash flows but also increase imports and reduce incentives for domestic value addition, negatively impacting the balance of trade.

‘Under SVAT, apparel exporters could purchase local raw materials without immediate cash outflows for VAT, promoting the use of domestically produced inputs. With the inefficient refund system, the incentive to buy local decreases. Such a scenario would eventually undermine the unique vertical integration benefits that Sri Lanka’s apparel industry offers, potentially threatening the sector’s viability and the jobs it supports.

“Reinstating a VAT refund system will demand substantial resources from the IRD for ongoing follow-ups and evaluations, leading to increased administrative costs and misallocation of precious resources. The additional burden on both the IRD and the industry is unnecessary and counterproductive,” Lawrence added.

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Business

Lumbini Tea wins top global honours in UK

Published

4 mins ago

2026/05/24

Thilina Walpola

Sri Lanka’s renowned specialty tea brand “Singharaja Wiry Tips,” produced by Lumbini Tea Valley Ceylon, has won two major accolades at the prestigious “The Leafies International Tea Awards” held recently at Fortnum and Mason in the United Kingdom.

The award-winning low-grown Ceylon tea secured the titles of “Best Ceylon Black Tea” and the overall “Best of All Black Teas,” emerging as the top black tea entered at the international competition.

With these latest honours, “Singharaja Wiry Tips” has now earned its 43rd and 44th international awards, further strengthening its reputation as one of the world’s most highly awarded black teas.

Classified as FBOPF EX SP (Flowery Broken Orange Pekoe Fannings Extra Special), the tea is named after its distinctive golden-tipped wiry leaves and unique flavour profile derived from the ecosystem surrounding the UNESCO World Heritage-listed Singharaja Rainforest, which borders the Lumbini plantation.

Lumbini Tea Valley’s latest innovation, “Lumbini Screw Buds,” also received high commendation at this year’s competition, highlighting the company’s continued excellence in producing premium Ceylon teas.

Chairman and Managing Director Chaminda Jayawardena, who accepted the awards in London, credited the achievement to the dedication of the Lumbini workforce and the support of nearly 1,800 tea farmers supplying high-quality green leaf harvested using the traditional “two leaves and a bud” method.

by SK Samaranayake

Business

AIA Lanka celebrates ‘Rising to the Top’ at annual awards night

Published

4 mins ago

2026/05/24

Thilina Walpola

AIA Insurance Lanka marked its annual Company Conference and awards ceremony in Colombo recently, celebrating employee performance under the theme ‘Rising to the Top.’

Held at Cinnamon Life at City of Dreams, the event brought together staff from across the organisation for an evening of recognition, reflection and entertainment, underscoring the insurer’s emphasis on growth and internal excellence.

The ceremony was formally inaugurated with a curtain raiser unveiling the theme ‘Rising to the Top,’ symbolising the company’s focus on continuous improvement and upward mobility.

Addressing the gathering, Director and Chief Executive Officer Chathuri Munaweera outlined the company’s strategic direction, business performance and future ambitions, reaffirming its commitment to strengthening market position and workforce capability.

The awards segment honoured both individual and team achievements across multiple categories. Nine employees received the CEO’s Special Awards for exceptional contributions, while 217 winners were recognised under the AIA Essentials Team Awards for collaboration and collective performance.

Elite sales performance was acknowledged through Top of the Table (TOT) and Court of the Table (COT) honours, followed by recognition for Financial Planning Executives who achieved Million Dollar Round Table (MDRT) status.

Organisers said the awards reflected a culture of shared success and sustained professional excellence within the organisation.

The evening concluded with stage performances by employees and guest artists, adding a celebratory note to the event as AIA Insurance Lanka reaffirmed its focus on performance-driven growth.

Business

Dialog Launches Air Fibre, Sri Lanka’s First 5G-Powered Ultra-Fast Wi-Fi Solution

Published

5 mins ago

2026/05/24

Thilina Walpola

Now available for pre-order via www.dialog.lk

Dialog Axiata PLC, Sri Lanka’s #1 connectivity provider, has announced the launch of Dialog Air Fibre powered by 5G, marking a significant step in its commitment to delivering next-generation digital experiences. This latest innovation marks yet another industry first by Dialog, reinforcing its longstanding commitment to delivering cutting-edge technology to customers across the country.

Dialog Air Fibre is a pioneering Wi-Fi technology, introduced for the first time in Sri Lanka, operating on Dialog’s advanced 5G network to deliver high-speed internet without the need for physical cables. Purpose-built for modern lifestyles, the service offers a seamless plug-and-play experience through a compact, limited mobility Indoor Device Unit (IDU), enabling effortless setup and immediate connectivity.

With significantly enhanced performance, Dialog Air Fibre delivers ultra-fast Wi-Fi connectivity, offering a substantial improvement over typical 4G experiences. The solution ensures uninterrupted connectivity even during power outages, supported by a built-in battery providing up to six hours of continuous usage. Also engineered to support multiple devices simultaneously without compromising speed, Dialog Air Fibre offers low latency compared to 4G, ensuring smooth streaming, video conferencing, online gaming, and remote working experiences.

Additionally, Air Fibre goes beyond traditional connectivity by bringing together high-speed internet, entertainment, and digital lifestyle services into a single solution. Bundled with 104 TV channels via Dialog Play, alongside free content and attractive entertainment subscriptions, it delivers a seamless and enriched experience for the entire household, representing the next evolution of home entertainment in Sri Lanka.

Commenting, Lim Li San, Group Chief Operating Officer of Dialog Axiata PLC said, “Dialog Air Fibre represents a meaningful step forward in our mission to democratise access to high-quality connectivity across Sri Lanka. By combining innovation with practicality, we are enabling customers to enjoy reliable, high-speed 5G broadband through a convenient plug-and-play Wi-Fi solution, without traditional constraints. This launch reflects our continued commitment to investing in future-ready technologies and delivering inclusive digital experiences that support the evolving needs of individuals, homes, and businesses.”

To mark the launch, customers can enjoy exclusive benefits when pre-ordering Dialog Air Fibre, including a LKR 2,500 discount on the initial connection fee. Pre-orders can be placed by visiting dialog.lk or any Dialog Experience Centre islandwide.

Through the introduction of Air Fibre, Dialog continues to strengthen its leadership in innovation by redefining Wi-Fi experiences and empowering customers with flexible, high-performance internet solutions that meet the evolving needs of modern households across Sri Lanka.