SLFFA calls for urgent policy rethink on SVAT

THE Sri Lanka Logistics and Freight Forwarders Association (SLFFA) yesterday urged the Government to urgently reconsider the recent changes to the Simplified Value Added Tax (SVAT) scheme, warning that the move could have serious implications for the logistics and export sectors.

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In a statement, SLFFA highlighted that the withdrawal of SVAT for exporters and related service providers has created additional cash flow burdens on companies already grappling with tight margins, fluctuating global freight rates, and rising operational costs.

The association stressed that logistics plays a pivotal role in supporting Sri Lanka's export competitiveness, and the SVAT mechanism had long served as a crucial facilitator by eliminating unnecessary delays and administrative bottlenecks in VAT refunds.

Logistics solutions providers relied on SVAT across a wide range of operational expenses, including utilities, fuel for transport solutions, warehouse and office rent, capital purchases, and outsourced haulage costs.

According to the association, forcing these items back into the standard VAT refund cycle risks immobilising significant amounts of working capital and increasing administrative inefficiencies.