Doing away with the SVAT (Simplified Value-Added Tax) system and replacing it with another system would be a major burden on the export sector, said the President, Free Trade Zone Manufacturers Association (FTZMA) and Director, ATG Ceylon, Fazal Abdeen.

Speaking at their 37th annual general meeting where Abdeen was re-elected, he said that under the proposed new system it takes a longer time to recall VAT and the additional paperwork is really discouraging.

“Due to this exporters face tremendous hardships and we have to keep aside around 16% of earnings with the Inland Revenue for almost four months.”

According to an official from the Finance Ministry they are yet to take a decision on the termination of SVAT. The move followed joint submissions made by the Ceylon Chamber of Commerce, Joint Apparel Association Forum, Exporters Association of Sri Lanka, Lanka Fruit and Vegetable Producers, Processors and Exporters Association, National Chamber of Exporters, National Chamber of Commerce and Sri Lanka Shippers’ Council.

However Abdeen said that fresh moves are being taken to re-implement a new system.

He also said that the zone has an acute employment shortage and youth do not like to work in the free trade zones. “The teledramas have demeaned the FTZ worker and they too are responsible for this.”

Meanwhile Secretary of the FTZMA Dhammika Fernando said that the high-tech waste, sludge, oil waste management and clearing and disposal is still a major issue at the Katunayake Export Processing Zone.

“There is a dumping yard but not for dumping high tech waste and this issue has to be addressed soon.”