Opposition Leader Sajith Premadasa has voiced strong criticism over the government’s planned changes to Value Added Tax (VAT), cautioning that the sweeping measures could place added pressure on businesses and the broader economy.
In a post shared on X, Premadasa stated that from July 1, Sri Lanka will simultaneously widen the VAT net, increase tax rates, and strengthen enforcement mechanisms. He pointed out that small and medium-sized enterprises (SMEs) are set to be brought into the tax framework, while financial services would face higher levels of taxation. The digital economy, he added, would also be incorporated into the VAT system.
The Opposition Leader further highlighted that these changes would result in increased compliance obligations for businesses, raising concerns about the practical challenges of adapting to stricter requirements.
Describing the approach as one of “extraction” rather than genuine reform, Premadasa warned that such policies risk stifling economic activity. He argued that sustainable growth cannot be achieved solely through taxation, emphasizing that businesses require space to operate and remain viable.
“If businesses are unable to survive, there will eventually be little left to tax,” he cautioned, underscoring the potential long-term impact of the proposed measures.
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