Thursday, September 3 2026
Thursday, September 3 2026
MONETABRIEF – Sri Lanka based BPPL Holdings, a plastic recycler, says an anomaly in the value added tax regime has made draw textured yarn uncompetitive against imports.
BPPL produces Draw Textured Yarn (DTY) which is exempt from VAT. When a product is exempt, the input tax cannot be claimed. But at the moment there is no VAT on imported DTY.
"Being the only complete manufacturer of recycled polyester yarn in the Country, we would like to see the withdrawal of this exemption by the Government as part of the simplification of the VAT regime," BPPL Holdings Chairman Anush Amarasinghe said in the annual report.
"This will make locally manufactured DTY price competitive, as any VAT incurred on inputs will be either recovered or refunded."
BPPL exports most of its products which includes brushes and monofilaments or sells materials to final exporters. Exports are zero rated.
Sri Lanka has several quirks in it its VAT regime that hits exporters with a new one coming under the current IMF program after the 2020-2022 currency crisis.
Unlike in East Asian countries like Vietnam, sales by local raw material producers are not zero rated to export processing zones.
In East Asia sales into zone are treated the same as exports and goods can be easily transferred within zones.
Sri Lanka also has a supposed VAT on financial services which is not recoverable. That VAT was imposed after a currency crisis in 2001. (Colombo/Sept03/2026)
| 3 month bill | 9.22% | 22bp ▼ |
| 12-m bill | 9.91% | 10bp ▼ |
| Gold (Ounce) | $4602 | - - |
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