COPF chairman highlights the potential of a cashless and digital society
By: Staff Writer
Colombo (LNW): Chairman of the committee of public Finance (COPF), Dr. Harsha de Silva MP has addressed critical issues, starting with the pressing need for tax reform.
He highlighted that tax revenue currently stands at only 8% of GDP, a stark contrast to the 20% it once represented during President Premadasa’s time. Dr Harsha emphasized the importance of revenue rationalization while ensuring fairness in the tax system.
He made these observations at a recent event, titled “Insights with Harsha: Smart Policies & Economic Revival,” which has brought to light key policy discussions essential for Sri Lanka’s economic revitalization.
He also touched upon the topic of demonetization, drawing on India’s experience. He acknowledged both advantages and disadvantages but underscored the potential for transitioning towards a cashless and digital society through the adoption of e-wallets and digital identification systems like Aadhar.
He highlighted that achieving a cashless society should rely on regulation and incentives rather than abrupt demonetization, driving Sri Lanka into a more digitized future.
Another vital issue raised during the event was the adoption of cost-based tariffs or cost-reflective pricing. Harsha noted that this approach reduces government expenditure that would otherwise be used to support loss-making enterprises.
He cited an example of the recent need for Rs 231.5 billion to cover payments to CPC for fuel, illustrating how mispricing can place a burden on taxpayers.
The event also emphasized the need for reforms with a focus on empathy. Harsha’s vision is to instill hope in the youth by demonstrating that meaningful reforms can pave the way for a brighter future. He stressed the importance of committed leaders who understand the challenges faced by the younger generation.
A notable point raised during the event was the need for Sri Lanka to invest in skills development, similar to the successful approach in Tamil Nadu.
Dr. Harsha emphasized that to propel the nation forward, the workforce must be equipped with the right skills.
Tamil Nadu’s 550 engineering schools at various levels produce the talent required by various industries, helping the state aspire to achieve a trillion-dollar GDP by 2030. This underscores the importance of nurturing a skilled labor force.
Audience questions covered various topics, including demonetization, VAT increases, the brain drain, and the development of skilled labor. Harsha’s responses highlighted the need for growth, trade, and investment policy reforms, as well as technology adoption to drive total factor productivity.