📈 Govt Defends Fiscal Reforms Amid Opposition Critique on Tax & Trade Impact

A public debate has intensified between Deputy Minister Chathuranga Abeysinghe and Opposition MP Dr. Harsha de Silva over Sri Lanka's revenue-mobilisation and economic reform strategy. • Fiscal Performance & Strategy: • Government revenue reached 16.7% of GDP in 2025. • Q1 2026 revenue collection has significantly exceeded official targets. • The Government aims to formalise the economy, stating that a systematic tax net could eventually lower Value Added Tax (VAT) to 10%–12% from the current 18%. • Taxation & Consumer Concerns: • Dr. de Silva warns that the cascading effect of the Social Security Contribution Levy (SSCL) pushes the actual consumer tax burden well above the 18% VAT rate. • A June 30 deadline to bring online casinos and betting platforms into the tax net is under close parliamentary oversight. • Sector Impact & Trade Policy: • Coconut Industry: The opposition warns a proposed duty on coconut oil imports could divert local coconuts away from high-value export contracts, threatening foreign exchange earnings. • Agriculture & Poultry: Higher taxes on maize imports are projected to elevate domestic chicken and egg prices. • Rice & Farming: A planned import of 150,000 MT of rice faces criticism for potentially depressing farm-gate prices and disrupting paddy farmers' income.