E-commerce controversy:
Chairman of the Committee on Public Finance (COPF) Dr. Harsha de Silva has alleged that the government’s long standing failure to adopt a proper tax system for e-commerce allowed various platforms to exploit the local market. The SJB lawmaker also found fault with the Customs for not addressing this issue until their failure was exposed in Parliament.
The former UNP State Minister issued the following statement yesterday: “As Chair of the Committee on Public Finance (COPF), I’m committed to building a fair and transparent economy for Sri Lanka. Recent accusations, directed at me regarding curtailing e-commerce, are baseless and misleading. Let me set the record straight and address the real issue.
On June 3, 2025, our COPF inquiry exposed Customs’ informal weight-based tax system for e-commerce, which lacked legal backing for years. The government’s inaction allowed platforms like Temu to flood our market with untaxed bulk imports, undercutting local SMEs and taking undue advantage of the loopholes in the law. Then when this practice had come to light in April during meetings with stakeholders, Customs had scrambled to revert to HS code-based taxation, but without a proper framework, consumers are now facing absurd costs—a 500 LKR item can incur 37,000 LKR in charges. This inefficiency hurts shoppers, businesses, and our economy.
I’m advocating for dedicated and simplified HS codes for B2C e-commerce and vendor-collected taxes, like VAT systems in the EU and Vietnam, to ensure fair pricing, protect local SMEs, and boost transparent revenue collection. E-commerce should empower consumers and entrepreneurs, not penalise them. I’m fighting for a system that supports public aspirations—affordable online shopping, thriving local businesses, and a stronger Sri Lanka.”