Consumers Paying 22% Tax Burden While Govt Claims 18% VAT, Says Dr. Harsha de Silva

Opposition parliamentarian Dr. Harsha de Silva has alleged that Sri Lankan consumers are shouldering a tax burden of approximately 22 percent — significantly higher than the 18 percent Value Added Tax figure cited by the Government — due to the compounding effect of cascading taxes applied across the supply chain.

Cascading Taxes Hitting Ordinary Citizens Hard

Dr. de Silva raised the alarm over what he described as a deeply unfair tax structure that disproportionately impacts everyday consumers. He argued that when multiple layers of taxation are applied at different stages of production and distribution, the cumulative burden passed on to the end consumer far exceeds the official VAT rate of 18 percent.

The opposition MP stressed that while working-class Sri Lankans are made to bear this growing financial pressure through higher prices on essential goods and services, the Government has failed to ensure a level playing field in the country's broader tax framework.

Online Casinos and Betting Escaping the Tax Net

Dr. de Silva also drew sharp attention to what he called a glaring inconsistency in the country's tax policy — the apparent absence of meaningful taxation on online casinos and betting platforms. He pointed out that these industries continue to operate and generate revenue largely outside the formal tax net, representing a missed opportunity for the state to broaden its revenue base.

The lawmaker argued that it was deeply unjust for the Government to impose heavy tax burdens on ordinary consumers purchasing basic necessities, while lucrative online gambling operations remain largely unregulated and untaxed.

Calls for Transparent and Equitable Tax Reform

Dr. de Silva's remarks have reignited debate around Sri Lanka's tax policy at a time when the country continues to navigate a challenging economic recovery. Critics of the current administration have long called for a more transparent, broad-based, and equitable taxation system that does not place undue strain on low and middle-income households.

The opposition has urged the Government to revisit its tax structure, eliminate cascading effects that inflate the real cost of living, and bring untaxed sectors — particularly rapidly growing digital industries such as online gambling — into the formal revenue framework.

No immediate response was forthcoming from the Government regarding Dr. de Silva's specific allegations at the time of publication.

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