Adam Smith goes digital

SRI Lanka's path to economic recovery isa delicate balancing act.

- By Dr. Nadee Dissanayake

The country is navigating fiscal discipline, IMF conditionalities, debt restructuring, and the urgent need to restore publicconfidence.Taxation, once seen asa technical instrument, has now become intensely political, affecting households, businesses, andthe credibility of the State itself. Reforms including higher rates, broader tax bases, and more rigorous enforcement have strengthened revenues. But they have also sparked frustration among salaried employees, small enterprises, and informal sector participants, many of whom feel disproportionately burdened.

Revisiting Adam Smith's 18th century wisdom

In today's Sri Lanka, facing economic fragility and public skepticism, itis timely to revisit ‘Adam Smith’ 18th-century wisdom. His four canons of taxation equity, certainty, convenience, and economy were designed to create afairand efficientsystem. More than 250 years later, these ideas are still relevant, offering a guiding framework for reform. However, applying them nowis not straightforward Blindly following the old rules will not work. Instead, they need careful reinterpretation to fit a modern context: one shaped by digital systems, political sensitivities, and economic uncertainty, where faimess and trust are as crucial asefficiency.