Opposition Leader Sajith Premadasa stated that several important issues have become taboo subjects in the economic discussions taking place in Parliament today. He said that public pressure, public hardship, public frustration, and the people’s inability to survive are no longer being adequately addressed.
He pointed out that poverty in Sri Lanka has risen to between 30% and 40%, while industries have collapsed, millions have lost their jobs, exports have weakened, and the economic activities of farmers, fishermen, workers, entrepreneurs, and the general public have been severely disrupted.
Although the government highlights the success of the primary account and state revenue performance, Premadasa argued that these achievements have been realized primarily through increased taxation. He stated that any government can increase state revenue and improve the primary balance by imposing higher taxes on the public.
The Opposition Leader made these remarks while participating in the parliamentary debate on the economy held today.
Premadasa further noted that the economic activities of businesspeople who have generated millions of jobs in the country—including micro, small, and medium-scale industrialists, entrepreneurs, and large-scale industrialists—have also been adversely affected. He said the government could have introduced a program to establish factories, similar to the 200-garment factory initiative implemented in the past. Instead, he claimed, the administration has increased taxes on individuals and institutions, raised VAT from 8% to 18%, imposed a 2.5% Social Security Contribution Levy, and expanded the tax burden since January 2024 to cover 97 previously exempt goods and services.
Cigarette Tax Reduced from 74% to 66.8%
Premadasa also claimed that, contrary to expectations, the government has effectively reduced cigarette taxation. Referring to recommendations by the World Health Organization, he said cigarette taxes should be maintained at 75%.
According to him, the cigarette tax rate, which stood at 74% in 2028, has been reduced to 66.8% at present. He noted that while VAT and other taxes have been increased, placing a heavy burden on the public, the tax on cigarettes has been reduced. He further stated that the tax per cigarette, which was Rs. 9 previously, has been reduced to Rs. 8, resulting in a loss of Rs. 17.3 billion in government revenue.
Government to Lose Rs. 17.3 Billion Through Cigarette Tax Reduction
The Opposition Leader emphasized that the revenue loss resulting from the reduction of cigarette taxes exceeds several key government budget allocations.
He noted that the disaster management sector has been allocated Rs. 14.8 billion, while the revenue loss caused by the reduction in cigarette taxes exceeds that amount. He further pointed out that Rs. 12.9 billion has been allocated for nutrition and security-related initiatives, and Rs. 7.2 billion for maternity leave benefits, yet the reduction in cigarette taxes has resulted in a greater loss of state revenue.
Premadasa stated that even a one-rupee increase in cigarette taxation could generate an additional Rs. 17.3 billion in government revenue. He urged the government to provide relief to the public, reduce the prices of essential goods, and directly engage with citizens to understand the real cost of living faced by ordinary people.
Development Hub Becoming a Headquarters for Cyber Criminals
Premadasa also expressed concern over the rise of cybercrime in Sri Lanka. While the government promotes the vision of transforming the country into a development hub, he alleged that various legal relaxations have enabled Sri Lanka to become a base for cyber fraud operations.
He claimed that cybercriminals from Cambodia and the Philippines have established operations in Sri Lanka, turning the country into a center for cyber fraud. He called for a thorough investigation into the matter.
Provide 15% Interest Relief for Pensioners
The Opposition Leader further stated that elderly pensioners in Sri Lanka were previously receiving a 15% interest return on their funds. However, he alleged that the current government has reduced this benefit, causing dissatisfaction among millions of pensioners.
He urged the government to restore this interest income and provide relief to elderly pensioners who depend on such earnings for their livelihood.
