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Cabinet approval to repeal SVAT from April 2025

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The Cabinet of Ministers has given the green light for a proposal furnished by President Ranil Wickremesinghe to revise the date to implement the provisions to repeal the simplified value-added tax (SVAT) to April 01, 2025.

The approval was given at the Cabinet meeting on Monday (Sept. 11).

The President, in his capacity as the Minister of Finance, Economic Stabilization & National Policies, has suggested that a proposal regarding the aforementioned revision be submitted to the committee stage of Value-Added Tax (Amendment) Bill when it is taken up for discussion in the parliament.

Previously, the Cabinet of Ministers had given the nod to submit to the parliament the draft bill prepared by the Legal Draftsman to revise the VAT Act No. 14 of 2022 including the repeal of SVAT scheme with effect from January 01, 2024.

However, the government says the representations made by relevant parties have pointed out that drastic issues are likely to emerge in finance flow in relation to individuals especially the exporters who have been registered under the system at present if the SVAT system is repealed without a strong VAT repayment system.

Therefore, it is apparent that it is appropriate to repeal the SVAT system step by step until a strong tax repaying mechanism is established, the government said further in a statement.

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IMF grants waivers despite obligation breach & erred reporting

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The Executive Board of the International Monetary Fund (IMF) reviewed non complying purchases made by Sri Lanka under the 2023 Extended Arrangement under the Extended Fund Facility (EFF) as well as inaccuracies of information reported to the IMF.

However, the IMF has decided to grant waivers and not pursue further action, citing corrective measures and a commitment to reform by Sri Lankan authorities.

Following the Executive Board’s discussion, Deputy Managing Director and Acting Chair – Mr. Kenji Okamura, has issued the following statement:

“The Executive Board of the International Monetary Fund (IMF) reviewed non complying purchases made by Sri Lanka under the 2023 Extended Arrangement under the Extended Fund Facility (“EFF”), as well as a breach of obligations under Article VIII, Section 5. The noncomplying purchases arose as a result of the provision of inaccurate information by the authorities on the stock of expenditure arrears at the first, second, and third reviews under the EFF.

“The inaccuracies in information provided to the IMF were inadvertent and arose because of weaknesses in the timely reporting of arrears by line ministries to the Ministry of Finance, as well as a misunderstanding by the authorities of the definition of “arrears” under the Technical Memorandum of Understanding. 

“The Executive Board positively considered the authorities’ corrective actions, the fact that arrears repayments will be accommodated within the existing fiscal envelope, and the authorities’ commitment to improving public financial management procedures in line with the new PFM law, to reduce the risk of accruing arrears or inaccurate reporting of information going forward. In view of the above, the Executive Board agreed to grant waivers for the nonobservances of the quantitative performance criterion that gave rise to the noncomplying purchases and decided not to require further action in connection with the breach of obligations under Article VIII, Section 5.”

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Abdul Wazeeth appointed to Parliament from SLMC national list

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Abdul Wazeeth of the Sri Lanka Muslim Congress (SLMC) has been appointed as a Member of Parliament, the National Election Commission has announced.

His appointment comes following the resignation of former MP M. S. Naleem, who had entered Parliament through the SLMC National List after the 2024 parliamentary election.

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Tense situation in Kahawatta as residents clash with police

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Police had been compelled to use tear gas to control a tense situation that erupted between residents and police in Kahawatta following the funeral of a youth who was shot dead recently.

The funeral was held today (July 03) and the clash had broken out shortly afterwards.

Residents had expressed anger over the handling of the and had hurled stones at the police, reports say.

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