The Parliamentary Committee on Public Finance (CoPF) MP and economist Dr. Harsha de Silva on Saturday firmly rejected accusations that he is seeking to curtail e-commerce in the country, calling recent claims “baseless and misleading,” whilst insisting on the need for fair and transparent reforms in online trade 

taxation. 

“On 3 June 2025, CoPF inquiry exposed Customs’ informal weight-based tax system for e-commerce, which lacked legal backing for years,” he clarified via a post on ‘X’. 

According to him, the Government’s inaction allowed platforms like Temu to flood the market with untaxed bulk imports, undercutting local Small and Medium Enterprise (SMEs) and taking undue advantage of loopholes in the law.

Dr. de Silva noted that after this loophole was highlighted in stakeholder meetings in April, Sri Lanka Customs scrambled to revert to a Harmonised System (HS) code-based taxation system, but without a proper framework in place. 

“Consumers are now facing absurd costs—a Rs. 500 item can incur Rs. 37,000 in charges. This inefficiency hurts shoppers, businesses, and our economy,” he stressed. 

Outlining his suggestion for reform, Dr. de Silva advocated for dedicated and simplified HS codes for B2C (business-to-customer) e-commerce, alongside vendor-collected tax models like VAT systems in the European Union (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 your aspirations—affordable online shopping, thriving local businesses, and a stronger Sri Lanka,” Dr. de Silva opined.