With the rapid growth in technology and the busy life styles, online transactions have now become very popular and a compulsory in day today activities. In a way these transitions have become a method of bypassing the formal taxes and charges which are otherwise applicable in regular trade and financial transactions. Specially, taxes are not properly charged at the points of port, airport and the post office and courier services when such goods enter the country. As a result, there is a significant revenue leakages to the government income.
Therefore, Information Communication Agency (ICTA) is to create a common platform to facilitate online firms such as amazon, ebay, alibaba etc to be able to collect taxes on behalf of the government for transactions carried out within Sri Lanka. This will be monitored by the General Treasury. Taxation of online transactions and e-commerce activities creates a lot of practical problems as it is difficult to establish the trade or business carried out in Sri Lanka by the relevant foreign parties. Further taxes which could be levied on the local recipient of goods and services also create issues.
ICT experts are with the view that the Finance Ministry should start a proper dialogue with e-commerce firms before implementing taxes.