📈 UN Explores Digital Platforms as Tax Collectors: Kapruka Shares Sri Lankan Insight

The 9th Session of the UNCTAD Intergovernmental Group of Experts on E-commerce and the Digital Economy in Geneva evaluated utilizing digital platforms to strengthen fiscal revenues in developing nations, featuring operational insights from Sri Lanka's e-commerce sector. • SME Impact & Tax Reform: Kapruka Holdings PLC Founder Dulith Herath highlighted that following Sri Lanka’s January 2024 VAT reform, new SME seller signups on Kapruka’s marketplace dropped by 20% to 40%. The sharpest declines occurred among micro-merchants outside Colombo, home-based producers, and women selling food and handicrafts. • Policy Recommendations: Herath cautioned developing states against directly adopting the EU's "deemed supplier" model (making platforms the legal sellers for tax purposes). He instead proposed a graduated framework: • Information returns as a first step. • Tiered compliance based on seller size. • A single national tax data gateway across agencies. • Postponing the platform-as-collector role until infrastructure matures. • Cross-Border Trade: Drawing from Kapruka’s Global Shop service, it was noted that price opacity during customs clearance actively pushes a portion of cross-border e-commerce trade into informal channels. • Strategic Outlook: The session concluded with a call for governments to treat domestic digital platforms as essential "fiscal infrastructure"—similar to banks and telecoms—rather than regulatory targets, to ensure sustainable revenue collection with minimal friction.