Sri Lanka Urged to Exclude Traders from VAT and End Double Taxation

Calls have intensified in Sri Lanka urging fiscal authorities to reconsider tax structures impacting commercial traders, with specific appeals to exempt merchants from the Value Added Tax (VAT) regime and dismantle frameworks that lead to double taxation.

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The push addresses concerns over the cumulative tax burden placed on domestic trade. Advocates for the adjustments argue that imposing VAT across multiple stages of trading, combined with existing duties and levies, results in compounding costs that elevate final retail prices and constrain merchant liquidity.

Key Demands

  • Exemption of commercial traders from the standard Value Added Tax umbrella to prevent cascading cost inflation.
  • Immediate elimination of double taxation mechanisms affecting wholesale and retail distribution channels.
  • Re-evaluation of fiscal collection structures to reduce operational friction across domestic supply chains.

The broader implications point to ongoing frictions within Sri Lanka’s revenue collection strategies. While state authorities face pressure to widen the tax base and stabilize national revenue, the trading community warns that excessive and overlapping taxation risks stifling commerce and escalating the cost of living for consumers nationwide.

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