A controversial tax move sparks outrage as Sri Lanka’s tech industry faces a sudden 18% VAT, raising fears of broken promises, youth setbacks, and a blow to innovation.
The government’s decision to impose an 18 percent Value Added Tax on software services, effective from the 08th, has triggered strong criticism from multiple quarters, particularly within the technology and startup community.
Samagi Jana Balawegaya MP Dr. Harsha de Silva stated that this move has caused significant inconvenience to the youth population in Sri Lanka, especially those engaged in the fast-growing digital economy and software development sector.
He pointed out that during the recent election campaign, the President had pledged to provide tax relief to the software industry and even proposed reducing VAT to zero, but the current policy direction appears to contradict those commitments.
Dr. Harsha de Silva emphasized that the imposition of such a tax represents a serious injustice to the younger generation, as it directly undermines opportunities in the technology sector and contradicts the promises made by the government prior to coming into power.
He further warned that this additional tax burden could slow down the rapid growth of Sri Lanka’s software and IT industry, potentially discouraging innovation, foreign investment, and startup expansion within the country.
The MP also stressed that this decision risks eroding public trust, as it signals a departure from the assurances given to voters through the government’s election manifesto and economic vision for the future.
