The government is mulling applying taxes to online transactions within Sri Lanka but local firms protest the move with stifle the growth of e-commerce.

E-commerce has taken off in Sri Lanka with a large number of websites and apps flooding the market and the government feels it must be regularized and taxed.

Local firms argue that Sri Lankan authorities must initiate dialogue with e-commerce providers in Sri Lanka before making any moves to apply taxes to online transactions.

The Sri Lanka government envisions a common platform, hosted by the Information and Communication Technology Agency (ICTA), to facilitate online firms such as Amazon, e-Bay etc.

Local firms argue that any move to tax online purchases will stifle digital growth that has taken off in Sri Lanka and instead propose a tax-haven to encourage growth.