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Shalini
Shalini
May 29 2026
70Raises concerns over 18% VAT payable on raw material purchases from indirect exporters/deemed exporters Discuss several other important operational and policy matters including proposed establishment of two fuel sheds in KEPZ and BEPZ, and disparity in diesel pricing for the industrial sector
FTZMA Executive Committee members, led by the Chairman, Dhammika Fernando met the Acting BOI Chairman Dr. Sulakshana Jayawardena and Director General Renuka Weerakoon to discuss several urgent matters affecting BOI enterprises and export-oriented manufacturers.
A key focus of the meeting was the concern faced by the local Suppliers, indirect exporters / deemed exporters regarding the 18% VAT payable on raw material purchases from such suppliers.
FTZMA highlighted that imposing VAT on locally sourced production inputs used for exports creates an unfair cash-flow burden, weakens export competitiveness, increases net foreign exchange outflows and places export manufacturers at a disadvantage.
FTZMA strongly emphasised the need for a practical mechanism to extend VAT exemptions, zero-rating facilities, to both indirect and local suppliers when supplying to the Exporters!
The delegation also discussed several other important operational and policy matters, including the proposed establishment of two fuel sheds in KEPZ and BEPZ, the disparity in diesel pricing for the industrial sector between CPC and LIOC, the proposed transfer of BOI Import/Export Services functions to Sri Lanka Customs, and matters relating to the Economic Transformation Act (ETA).
During the meeting, it was also informed that Sri Lanka Customs will not be taking over the Import/Export Services functions currently handled by the BOI. The present BOI-led arrangement will continue, and the status quo will be maintained.
In the meantime, a new set of verification officers is expected to be recruited, while Sri Lanka Customs will monitor BOI imports and exports through a back-office mechanism, without disrupting the current operational process followed by BOI enterprises.
FTZMA to further engage with the Power and Energy Ministry to discuss fuel pricing etc. along with the BOI.
Further, FTZMA raised with the Acting Chairman the issue of vacancies for Zone Directors in several BOI Zones and was informed that the advertisement process is already underway to recruit a new Executive Director – Zones, fill the vacant Zone Director positions, and recruit staff for over 100 vacancies across various departments of the BOI.
Overall, the meeting was constructive and encouraging. FTZMA will continue its close engagement with the BOI and other relevant authorities to safeguard export competitiveness, ensure operational continuity, and address the practical concerns faced by BOI enterprises.
Source: Daily FT
Raises concerns over 18% VAT payable on raw material purchases from indirect exporters/deemed exporters
Discuss several other important operational and policy matters including proposed establishment of two fuel sheds in KEPZ and BEPZ, and disparity in diesel pricing for the industrial sector
FTZMA Executive Committee members, led by the Chairman, Dhammika Fernando met the Acting BOI Chairman Dr. Sulakshana Jayawardena and Director General Renuka Weerakoon to discuss several urgent matters affecting BOI enterprises and export-oriented manufacturers.
A key focus of the meeting was the concern faced by the local Suppliers, indirect exporters / deemed exporters regarding the 18% VAT payable on raw material purchases from such suppliers.
FTZMA highlighted that imposing VAT on locally sourced production inputs used for exports creates an unfair cash-flow burden, weakens export competitiveness, increases net foreign exchange outflows and places export manufacturers at a disadvantage.
FTZMA strongly emphasised the need for a practical mechanism to extend VAT exemptions, zero-rating facilities, to both indirect and local suppliers when supplying to the Exporters!
The delegation also discussed several other important operational and policy matters, including the proposed establishment of two fuel sheds in KEPZ and BEPZ, the disparity in diesel pricing for the industrial sector between CPC and LIOC, the proposed transfer of BOI Import/Export Services functions to Sri Lanka Customs, and matters relating to the Economic Transformation Act (ETA).
During the meeting, it was also informed that Sri Lanka Customs will not be taking over the Import/Export Services functions currently handled by the BOI. The present BOI-led arrangement will continue, and the status quo will be maintained.
In the meantime, a new set of verification officers is expected to be recruited, while Sri Lanka Customs will monitor BOI imports and exports through a back-office mechanism, without disrupting the current operational process followed by BOI enterprises.
FTZMA to further engage with the Power and Energy Ministry to discuss fuel pricing etc. along with the BOI.
Further, FTZMA raised with the Acting Chairman the issue of vacancies for Zone Directors in several BOI Zones and was informed that the advertisement process is already underway to recruit a new Executive Director – Zones, fill the vacant Zone Director positions, and recruit staff for over 100 vacancies across various departments of the BOI.
Overall, the meeting was constructive and encouraging. FTZMA will continue its close engagement with the BOI and other relevant authorities to safeguard export competitiveness, ensure operational continuity, and address the practical concerns faced by BOI enterprises.
Source: Daily FT
