28/06/2026
VAT Threshold U-Turn: What SMEs Must Know
Sri Lanka’s proposed VAT threshold reduction from Rs. 60 million to Rs. 36 million has now been reversed.
This means businesses with annual turnover between Rs. 36 million and Rs. 60 million will not be required to register for VAT and will not need to charge VAT to customers.
However, there is an important point many businesses are missing:
The SSCL threshold reduction is still applicable.
From 1 July 2026, businesses exceeding Rs. 36 million annual turnover or Rs. 9 million quarterly turnover may be required to register for SSCL.
Key Takeaways for SMEs
✅ VAT threshold remains at Rs. 60 million
✅ No VAT registration required for turnover below Rs. 60 million
✅ SSCL threshold reduces to Rs. 36 million
✅ Quarterly SSCL threshold becomes Rs. 9 million
✅ SSCL is charged on turnover, not profit
✅ Businesses must review turnover carefully from July 2026 onwards
For many SMEs, this brings relief from VAT compliance, but SSCL obligations may still apply. Proper turnover monitoring, pricing review, and tax planning are now more important than ever.
At MNA Solutions, we help businesses stay compliant, understand tax changes, and plan ahead with confidence.
Need help checking whether your business is liable for VAT or SSCL?
Contact MNA Solutions today.
🌐 www.mnas.lk
MNA Solutions
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