SJB MP Dr. Harsha de Silva has urged the government to urgently suspend the removal of the SVAT scheme for exporters, warning of serious repercussions if relief is not granted amid rising global trade tensions following the re-imposition of U.S. tariffs.
In a series of posts on X (formerly Twitter), Dr. de Silva expressed his willingness to assist President Anura Dissanayake in navigating the crisis, stressing, “This crisis is national. Fallout could be huge.” He emphasized the need for Sri Lanka to “break tariff walls and build trade bridges” instead of reverting to protectionist policies.
Referring to the BIMSTEC Dialogue held recently, Dr. de Silva warned that without major trade and investment reforms, Sri Lanka’s regional integration goals would remain elusive. “RCEP will only be a dream unless we commit to liberalizing in goods and services,” he added.
He called on the government to immediately suspend next week’s amendment that would remove SVAT benefits for exporters, citing the growing economic uncertainty.
Adding to the alarm, former MP Charitha Herath highlighted that Sri Lanka’s 2024 trade deficit stands at $6.88 billion, cautioning that a sharp drop in U.S. exports could widen the deficit by $1.5 billion, drain reserves, and weaken the rupee.
Herath warned that a new debt crisis could be looming, as foreign investors may withdraw and export-driven companies might relocate to lower-tariff markets, threatening Sri Lanka’s industrial base.
Quoting Professor Wasantha Athukorala from the University of Peradeniya, Herath said Sri Lanka should seek a grace period on tariffs in the short term, while pursuing long-term reforms like strengthening free trade agreements (FTAs), diversifying exports, and building trade ties with China, India, and the Asia-Pacific region.
“Sri Lanka must boost production efficiency, enhance competitiveness, and create an investment-friendly environmentto weather this storm,” Herath said. He concluded with a challenge to policymakers:
“Can Sri Lanka turn this crisis into an opportunity? Do we have the leadership to drive necessary reforms? Now is the time for bold decisions and forward-thinking policies.”
