Sajith Premadasa criticizes planned VAT increases, calls policy “extraction”

May 4, 2026 11:28 am

Opposition Leader Sajith Premadasa has criticized the government’s upcoming Value Added Tax (VAT) changes, saying that from July 1 Sri Lanka will widen the VAT net, raise rates, and tighten enforcement simultaneously.

In a post on X, he said that small and medium-sized enterprises (SMEs) would be brought within the tax framework, financial services would be subject to higher taxation, and the digital economy would be incorporated into the VAT system.

He further noted that overall compliance obligations would also increase.

Premadasa argued that these measures amount to “extraction” rather than reform, warning that it is not possible to tax an economy into growth.

He said businesses need room to operate and survive, adding that if they are unable to do so, there would eventually be little left to tax.

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