IRD's new risk-based VAT system promises refunds in 15 days

► THE STATUTORY MAXIMUM FOR ISSUING REFUNDS IS SET AT 45 DAYS, HOWEVER, THE DEPARTMENT'S INTERNAL TARGET FOR COMPLIANT TAXPAYERS IS MUCH FASTER ► IRD COMMISSIONER STRESSED THE OBJECTIVE IS TO PROVIDE YOU WITH AN EVEN BETTER SYSTEM IN ITS PLACE

- By NISHEL FERNANDO

Eligible exporters with low and medium-risk profiles will be able to receive their VAT refunds within an expedited 15-day period under a new risk-based refund system, which is set to replace the current Simplified Value Added Tax (SVAT) system from 1 October 2025.

Inland Revenue Department (IRD) Commissioner Priyanka Dissanayake outlined the ambitious plan yesterday, which aims to drastically shorten the waiting period for highly compliant businesses. While the statutory maximum for issuing refunds is set at 45 days, the department's internal target for compliant taxpayers is much faster.

"We are not simply stopping after abolishing SVAT. Our objective is to provide you with an even better system in its place," she said, speaking at an official seminar hosted by the Department of Inland Revenue (IRD) in Colombo.