The Hon. Ravi Karunanayake

¶ 01 Hon. Deputy Speaker, before I start, may I seek a clarification? Will the Meeting of the Committee of Selection be held after this Debate?

¶ 02 Then, there would be no representation from the Opposition. That Meeting earlier scheduled at 5.00 p.m. has been postponed to 6.00 p.m. If it could be postponed till 6.15 p.m., it would be appreciated because you all changed the time three times.

¶ 03 Hon. Deputy Speaker, I also rose to add on to the suggestions that had been made earlier. I do not think we need to labour the points all over again as they have already been discussed. However, all I could say is that it is a suicidal tax that has been brought in. Nice words do not make much of a change, if the ultimate objective is to earn revenue.

¶ 04 Previously, if you were an accountant, logistics service provider, doctor or engineer contracted by those outside the country for your knowledge, you were exempt under Section 15(cc) because services were rendered abroad; that encouraged inflows. Now this suicidal attempt imposes 15 per cent where it was zero. If uniformity is the aim, why 15 per cent for one and 45 per cent for another? Let the IMF guide, not rule. We are elected to govern.

¶ 05 You seek Rs. 10.2 billion (about 0.04 per cent of GDP) from this — counterproductive. If you provide services to Maldives, Dubai or Singapore, why bring money back and pay 15 per cent when previously it was zero? We need foreign exchange, not Rs. 10 billion via this. You could add 25 cents to petrol to raise Rs. 12–15 billion instead. Big players will invoice through zero-tax jurisdictions. I table a document listing countries with no personal income tax, territorial systems and special regimes: UAE, Bahrain, Bahamas, Bermuda, Cayman Islands, Monaco, Vanuatu, Brunei, etc. Firms will book revenues there, leaving minimal profit here; earlier US$1 billion could flow in; now you risk losing it.

¶ 06 Territorial systems like Singapore tax foreign profits at zero. You also say zero tax inside Colombo Port City for 40 years while taxing 15 per cent outside. I support Port City zero to attract professionals and forex, but oppose 15 per cent on services elsewhere. Do not let “white clerks” from IMF dictate when you can earn billions differently.

¶ 07 Peter Brewer and the IMF did a good job under difficult circumstances, but we must negotiate. If a lawyer serves a client in India, why tax that foreign-earned fee? Banks are not taxed on such inflows; similarly, self-assessment applies in November and payments thereafter.

¶ 08 SLASSCOM Chairman Nishan Mendis said on 16 March 2025 they target US$5 billion and 1,000 startups by 2030. Hon. Deputy Minister, you are moving things in the right direction in IT; tell colleagues this tax is suicidal. Seeking Rs. 10 billion via this when you could collect much more via fuel pricing is unwise.

¶ 09 Youth, when disincentivized, will: 1) Keep money offshore; 2) Use dummies to reroute; 3) Emigrate, costing us travel forex and human capital.

¶ 10 We would be saving pennies and losing billions. SLASSCOM says this is inimical; they are moving from their current premises to Port City; your targeted 15 per cent will not be collected.

¶ 11 We must be radical to export ourselves out of a US$100 billion debt (53 per cent domestic, rest external, some reprofiled). We need US$3 billion, then US$6 billion, then US$9 billion annually to avoid another crisis. In 2016, under IMF tranche talks, we rejected similar impositions; we met revenue via alternatives. In 2018, when this was imposed, Minister Mangala Samaraweera withdrew it in six months due to its harm.

¶ 12 On betting and gaming at 45 per cent: first establish a regulator. Raising from 40 to 45 as low-hanging fruit is not a strategy; equitability and sustainability matter. Sin taxes should optimize revenue with proper regulation, not arbitrary hikes.