According to the proposal of the International Monetary Fund (IMF), if the government removes the SVAT facility, an efficient mechanism should be implemented for refunding the VAT, all the Associations of Export Industries informed the Sectoral Oversight Committee on Alleviating the Impact of the Economic Crisis.

The committee met on Monday (21)under the chairmanship of Member of Parliament Gamini Valeboda and representatives of all major Exporters’ Associations including the United Garment Manufacturers Association, the Rubber Products Exporters Association, the Tea Products Exporters Association and the officials of the Ministry of Finance, Department of Inland Revenue were present and there was a lengthy discussion regarding the government’s decision to remove the SVAT facility, the Parliamentary Communications Department said in a statement.

Finance Ministry officials pointed out that the government expects to take this decision to implement a successful tax system like the tax system in developed countries. But the exporters’ associations pointed out that even if there is no opposition regarding the removal of the SVAT facility, a proper mechanism must first be established in this country as in the developed countries.

It was also discussed that due to the long time taken for VAT refunds/repayments, it directly affects the cash flow of exporters and even after 7 years of RAMIS system was established in 2016 and spent billions, it is a problem that an efficient system for tax collection and refunds has not yet been established, the statement mentioned.

According to the Act, although taxes should be reimbursed within 45 days, it was discussed that taking a long time is a problem. Accordingly, corrupt situations have arisen to the extent that certain third-party groups, including officials, act as brokers for quick reimbursement of tax money.

It was also revealed that according to the cabinet decision related to removing the SVAT facility, if this facility is removed, a proper system should be established first, according to the Parliamentary Communications Department.
Although the officials of the Inland Revenue Department have said that the government is losing revenue through the SVAT system, the committee pointed out that the problem is that they do not present sufficient figures to confirm it correctly.

Therefore, the committee chairman, informed that a report on this matter should be submitted to the committee within a week. Also, he instructed the department to present clearly what is the alternative program for VAT reimbursement if this SVAT facility is removed, it added.

He also informed the export industrialists to submit a comprehensive report with all the quantitative data to the committee within a week.

The chairman of the committee emphasized that protecting the export industries, which play a huge role in the economy of the country, is a national responsibility and that the Sectoral Oversight Committees will constantly advocate for it. He further said that according to all these facts, recommendations are expected to be submitted to the government through the Parliament, it said.