The Inland Revenue Department will repeal the SVAT Scheme from 1 October 2025, with September (monthly) and July (quarterly) being the last periods under SVAT, after which standard VAT rules apply.
Sri Lanka’s Inland Revenue Department has issued a notice announcing that the Simplified VAT (SVAT) Scheme will be repealed effective 1 October 2025.
Introduced in 2011, the SVAT Scheme enabled eligible exporters and strategic projects to defer VAT payments at the transaction stage, rather than paying input VAT and claiming refunds later.
Effective 1 October 2025, the SVAT scheme will be repealed. All SVAT registrations, including those under Registered Identified Purchaser (RIP) and Registered Identified Supplier (RIS) statuses, will be cancelled. All RIP and RIS will be converted into the standard Value Added Tax (VAT) system. They must also cease accepting or issuing SVAT Credit Vouchers and begin issuing or requesting VAT invoices.
The repeal of SVAT is consistent with international best practices, simplifying compliance for all businesses and aligning them with standard VAT practices.
The monthly taxable period starting 1 September 2025 and the quarterly taxable period beginning on 1 July 2025 will be the last taxable periods before the SVAT repeal.
From taxable periods starting 1 October 2025, standard VAT compliance deadlines apply.
