Removal of tax exemptions on digital service exports threatens economic recovery: Harsha

Colombo, Feb 26 (Daily Mirror) - Claiming that the Governemnt's removal of tax exemptions on digital service exports threatens Sri Lanka's economic recovery, SJB MP Dr. Harsha De Silva said Sri Lanka must reconsider these shortsighted taxes.

Posting a statement on X, he said IT, Business Process Outsourcing companies, software firms, digital agencies, young freelancers on Upwork/Fiverr, content creators and professionals working remotely for global companies will be impacted due to the removal of tax exemptions.

"Sri Lanka DDS exports grew from USD 321M to over USD 1B since 2005. During our economic crisis, remote work has prevented further brain drain by allowing talented Sri Lankans to earn competitive salaries while staying in the country. We can't afford to lose more youth," he said.

"We are marketing Sri Lanka as a haven for foreign digital nomads while simultaneously taxing our own citizens for the same work. This sends conflicting signals to investors and undermines our competitiveness. President Anura Kumara Dissanayake aims to grow our IT workforce to 200,000 and achieve USD 5 Billion in IT exports. How can we reach these targets while implementing policies that discourage digital entrepreneurship and innovation, he asked.

The MP said other countries are creating incentives to grow their digital economies and that if the government makes Sri Lanka hostile to digital service exports, then the remaining talent will relocate - accelerating brain drain and forex loss. 

"We must reconsider these shortsighted taxes," he said.