Sri Lanka YouTubers Oppose Online Safety Act and 18% VAT on Digital Content

Colin Harischandra

Colombo, July 28, 2025 — Sri Lanka’s first professional digital media body, the Sri Lanka YouTube Creators’ Professional Association, held a special media conference at the Social and Religious Center Auditorium to mark the first anniversary of the organization. The event served as a platform to raise serious concerns about three pressing issues affecting the country’s digital ecosystem: the controversial Online Safety Act, the imposition of an 18% value-added tax on digital services, and the prolonged inactivity of the Right to Information Commission.

The event was led by Chairman Nissanka Mayadunnana, with Executive Committee Members Janaka Suranga and Sadun Liyanage also addressing the audience. The conference was widely seen as a significant moment for the country’s growing digital content creation community, which has voiced concerns about increasing governmental restrictions and financial burdens.

Online Safety Act: A Threat to Free Expression

Chairman Nissanka Mayadunnana voiced strong opposition to the Online Safety Act No. 9 of 2024, calling it a serious threat to digital freedom and the right to express oneself online. He warned that under the current provisions, users of social media platforms like YouTube and Facebook could face imprisonment, even for content critical of public authorities.

He highlighted what he called the “most dangerous aspect” of the law—granting law enforcement the power to arrest institutional heads under vague or broad interpretations of content violations. Citing personal experience, Mayadunnana claimed he had been previously detained under the act, stating that “these powers are being misused by corrupt elements in the system.”

The Act applies to individuals both inside and outside Sri Lanka and is intended to regulate online behavior and platform use. However, local and international observers have expressed concerns that the law could undermine human rights, suppress dissent, and silence criticism of government policies.

18% VAT on Digital Services: A Blow to Digital Entrepreneurs

Another key concern raised during the discussion was the government’s decision to implement an 18% Value Added Tax (VAT) on digital services, effective from October 1, 2025. The tax, aimed at generating approximately $36 million annually, has drawn criticism from creators and industry stakeholders alike.

According to Mayadunnana, the tax will directly harm Sri Lankan digital creators who rely on platforms like YouTube, TikTok, and Instagram to build global audiences and earn foreign income. “This isn’t just about creators—it’s about a community bringing in foreign exchange to the country, without depending on the government,” he said.

He warned that such a tax could discourage online entrepreneurship, limit foreign digital job opportunities, and shrink international investment in Sri Lanka’s growing digital economy.

RTI Commission Inactive for Over Three Months

The third major issue highlighted was the vacancy in the Chairperson’s post at the Right to Information (RTI) Commission, which has reportedly remained unfilled for over three months. As a result, the effective functioning of the RTI Act No. 12 of 2016 has been hindered, limiting citizens' ability to access public records and hold institutions accountable.

Various civil society organizations and media outlets have urged the government to act swiftly in appointing a chairperson to restore the commission's full operations. “The public’s right to information is a cornerstone of democracy. Leaving the Commission inactive is unacceptable,” said Mayadunnana.

A Call for Reform

The speakers emphasized that while Sri Lanka is moving toward a digital economy, laws and tax policies that stifle innovation and suppress expression could severely hamper the country’s potential. They urged the government to review the Online Safety Act, reconsider the VAT policy on digital platforms, and reactivate the RTI Commission to ensure transparency and support for digital growth.

“Digital content creation isn’t just entertainment anymore—it’s an industry. We need policies that empower, not punish,” Mayadunnana concluded.

Key Speakers:

• Chairman: Nissanka Mayadunnana

• Executive Committee Member: Janaka Suranga

• Executive Committee Member: Sadun Liyanage

They collectively called for a fair, transparent, and supportive policy environment that recognizes the economic and social contributions of digital creators across Sri Lanka.