Consumers are being forced to pay exorbitant charges for e-commerce purchases due to Sri Lanka Customs reverting to HS code-based taxation without a proper framework, according to COPF Chair Dr. Harsha de Silva.
In a statement on X, he revealed that a product worth just Rs. 500 can now incur taxes as high as Rs. 37,000.
Dr. de Silva criticized the long-standing use of an informal, weight-based tax system for e-commerce, which lacked legal authority and went unchecked for years.
He said the government’s inaction enabled platforms like Temu to exploit loopholes, flooding the local market with untaxed imports and hurting domestic SMEs.
After this issue was raised in April during stakeholder meetings, Customs abruptly shifted back to HS code-based taxation, but did so without a proper system in place—resulting in unfair costs to consumers.
He emphasized that this inefficiency harms not just consumers but also local businesses and the broader economy.
Rejecting accusations that he is trying to hinder e-commerce, Dr. de Silva said he is working to build a fair, transparent system that benefits all Sri Lankans.
He proposed introducing dedicated and simplified HS codes for B2C e-commerce and vendor-collected tax models, similar to those in the EU and Vietnam.
Dr. de Silva stated his goal is to make e-commerce affordable, protect small and medium businesses, and strengthen revenue collection through proper reforms.
“E-commerce should empower consumers and entrepreneurs, not punish them,” he said, pledging continued efforts toward a more efficient and fair tax system.
