Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe has defended the government’s tax and economic reform programme, accusing opposition MP Harsha de Silva of taking a political stance against efforts to formalise the economy and expand the tax base.
In a statement, Abeysinghe said Sri Lanka’s economy had remained largely informal for decades, limiting the government’s ability to collect revenue and creating a fiscal situation where a significant share of tax income was used to service debt obligations.
“It is very sad and unprofessional for him to take a political stance against the progress made by the Ministry of Finance to expand the tax base and move away from an informal economy,” he said.
Abeysinghe claimed that government revenue reached 16.7% of Gross Domestic Product (GDP) in 2025 and that revenue collection during the first quarter of 2026 had exceeded targets by a significant margin.
“When we have a systematic method of collecting taxes, we can gradually bring down tax rates. For example, VAT could eventually be reduced to around 10% to 12%, in line with global norms,” he said.
The Deputy Minister said strengthening the formal economy would help create a stronger fiscal position capable of withstanding both domestic and external economic shocks.
“There is no turning back. We will create a strong fiscal space that can withstand both internal and external shocks,” he said.
Abeysinghe also urged de Silva to focus on economic analysis rather than politics, stating: “I invite Harsha to be the economist he used to be and not another version of Sajith Premadasa.” (Newswire)