📈 FTZMA Urges BOI to Address 18% VAT Burden & Operational Concerns

The Free Trade Zone Manufacturers Association (FTZMA) held a constructive meeting with Acting BOI Chairman Dr. Sulakshana Jayawardena and Director General Renuka Weerakoon to address critical policy and operational issues impacting export-oriented manufacturers. Key Highlights: • Taxation & Competitiveness: FTZMA raised major concerns over the 18% VAT imposed on raw material purchases from local and indirect suppliers. They stressed that this creates an unfair cash-flow burden, weakens export competitiveness, and increases net foreign exchange outflows, urging for practical VAT exemptions or zero-rating mechanisms. • Customs Functions Update: It was confirmed that Sri Lanka Customs will not take over the Import/Export Services currently handled by the BOI. The existing BOI-led process will be maintained, supplemented by new verification officers and a non-disruptive back-office monitoring mechanism by Customs. • Energy & Infrastructure: Discussions covered the proposed establishment of two fuel sheds in the Katunayake (KEPZ) and Biyagama (BEPZ) export processing zones. FTZMA also highlighted the disparity in industrial diesel pricing between CPC and LIOC, with plans to engage further with the Power and Energy Ministry. • BOI Capacity: To address administrative delays, the BOI confirmed that recruitment is underway for a new Executive Director - Zones, vacant Zone Director positions, and over 100 departmental vacancies.