The Sri Lanka Logistics and Freight Forwarders Association (SLFFA) has urged the Government to urgently reconsider recent alterations to the Simplified Value Added Tax (SVAT) scheme, warning that the move could severely disrupt the logistics and export industries.
Issuing a statement, the SLFFA highlighted that the withdrawal of SVAT benefits for exporters and associated service providers has imposed new cash flow pressures on companies already struggling with narrow profit margins, volatile global freight rates, and rising operational expenses.
The association emphasised that SVAT has long been a critical mechanism enabling faster VAT refunds, reducing administrative delays and easing financial burdens on logistics providers.
These companies depend on the scheme to cover essential costs such as utilities, fuel, warehouse rent, capital equipment, and outsourced haulage.
“Exporters depend heavily on efficient supply chains. By removing SVAT, companies will now face blocked working capital and prolonged refund cycles, which in turn weakens the ability of the sector to remain competitive in the international market,” said SLFFA Chairman Channa Gunawardena.
Vice Chairman Andre Fernando warned that the sudden policy reversal undermines investor confidence at a time when Sri Lanka urgently needs stability to attract foreign trade flows.
Treasurer Shavindra Dias added that the financial strain is already limiting companies’ capacity to invest in infrastructure, technology, and skilled talent—key drivers of export growth.
The SLFFA cautioned that the move risks discouraging investment, reducing foreign exchange inflows, and ultimately jeopardising the country’s national export strategy.
The association has called for constructive dialogue between the Government, exporters, and service providers to develop a pragmatic framework that balances fiscal discipline with industry needs.
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