SJB MP Dr. Harsha de Silva has called on the government to urgently suspend the scheduled removal of the SVAT scheme for exporters, warning of serious consequences if no relief is provided amid escalating global trade tensions triggered by the re-imposition of US tariffs.
In a series of posts on X (formerly Twitter), Dr. de Silva said he is willing to assist President Anura Dissanayake in finding a way forward on the tariff issue, stating, “This crisis is national. Fallout could be huge.” He reiterated his long-held position that Sri Lanka must “break tariff walls and build trade bridges” rather than revert to protectionist policies.
Dr. de Silva also noted that during the BIMSTEC Dialogue held yesterday, he had warned that unless Sri Lanka undertakes major trade and investment reforms, integration with the region will remain out of reach. “RCEP will only be a dream unless we commit to liberalizing in goods and services,” he said.
While acknowledging the complexity of the issue, he urged the government to suspend next week’s scheduled amendment on SVAT removal for exporters as a matter of urgency.
Adding to the concerns, former MP Charitha Herath pointed out that Sri Lanka’s 2024 trade deficit stood at $6.88 billion, warning that a decline in exports to the U.S. could widen the deficit by at least $1.5 billion, deplete reserves, and weaken the rupee.
“Could another debt crisis be on the horizon?” Herath asked, cautioning that foreign investors may also withdraw and companies exporting to the U.S. might relocate to countries with lower tariffs, undermining Sri Lanka’s industrial base.
Citing Professor Wasantha Athukorala from the University of Peradeniya, Herath said Sri Lanka should, in the short term, request a grace period on tariffs. In the long term, he said the country must strengthen FTAs, diversify exports, and build stronger trade ties with China, India, and the Asia-Pacific region.
“Structural reforms are essential. Sri Lanka must boost production efficiency, enhance competitiveness, and create an investment-friendly environment to weather this storm,” he said, adding: “The key question: 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.” (NewsWire)
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