Sri Lanka Entering Final Stage for PayPal Inward Remittances 📈
Sri Lanka is nearing the completion of a long-awaited initiative to enable inward remittances through PayPal, according to Digital Economy Ministry Secretary Waruna Sri Dhanapala. • Current Status: The project is in its concluding phase following successful collaboration between private banks, PayPal, and the Central Bank of Sri Lanka (CBSL). • Economic Impact: SMEs & Freelancers: The move specifically targets internet-based service providers and the ICT/BPM sector, allowing them to receive foreign income through a formal, regulated mechanism. Foreign Exchange: By providing a local address option, the framework aims to capture "lost" forex currently held in overseas or proxy accounts. Formalization: The government expects a shift from informal channels (like Undiyal) to official platforms, improving transparency and tax compliance. • Regulatory Oversight: All transactions will fall under CBSL supervision, ensuring a secure and transparent digital payment ecosystem to strengthen national foreign exchange inflows. _Source: Digital Economy Ministry (Provisional)_
📈 Proposed Single Cigarette Ban: Economic & Market Risks
Sri Lanka's Sectoral Oversight Committee (SOC) is re-evaluating a total ban on the sale of individual cigarettes. While driven by health concerns, the proposal faces significant pushback regarding its economic impact on small retailers and the potential for market distortion. • Economic & Health Toll: Data from NATA indicates an annual economic loss of Rs. 225–240 billion and approximately 22,000 lives lost to tobacco and alcohol-related causes. • The Unregulated Market: Experts warn a ban on "single sticks" could drive consumers toward the Beedi market (priced at Rs. 10/stick) or illegal smuggled cigarettes. The illegal cigarette trade already deprives the government of over Rs. 100 billion in annual revenue. • Impact on MSMEs: For the "Petti Kade" (micro-retailers), cigarettes act as a "bridge product" that drives foot traffic for other essentials. A full pack currently costs upwards of Rs. 3,200, a price point inaccessible to many consumers in the current economic climate. • Key Concern: A shift from legal sticks to unregulated alternatives could undermine public health goals while squeezing the daily cash flow of thousands of small-scale shopkeepers and reducing national tax collection. _Status: Currently under discussion within the Sectoral Oversight Committee._ ---
Exporters Now Authorized to Invest in Local Dollar Bonds 📈
The Government has issued Regulations to Repatriation of Export Proceeds No. 01 of 2026 via Extraordinary Gazette, expanding the scope for exporters to utilize repatriated earnings for domestic foreign-denominated investments. • New Investment Access: The amendment updates the 2024 rules under the Central Bank of Sri Lanka (CBSL) Act, allowing exporters to invest in local loan instruments denominated in foreign exchange, a facility previously restricted to incorporated commercial banks. • Market Impact: This policy shift aims to increase demand for local Dollar Bonds, ensure competitive pricing, and deepen the domestic foreign exchange market. • Economic Objective: By enabling the apparel, tea, and ICT/BPM sectors to channel proceeds into these instruments, the move seeks to strengthen national reserves and promote economic stability through better classification of foreign exchange sources. • Regulatory Timeline: Following the initial issuance on 10 December 2025, these updated regulations await formal parliamentary concurrence to broaden participant eligibility.
CBSL Blacklists 24 Entities for Prohibited Pyramid Schemes 🚫
The Central Bank of Sri Lanka (CBSL) has issued a formal notice identifying 24 entities and apps as prohibited schemes under Section 83C of the Banking Act, No. 30 of 1988. This follows investigations confirming these groups promoted unlawful financial structures. • New Additions: I.C.A.N Advertising (Pvt) Ltd and its affiliates (bannercuts.com, etc.) are the latest to be officially prohibited following CBSL investigations. • Key Prohibited Entities: • OnmaxDT, MTFE App (and its various SL groups), and Ledger Block. • Global Lifestyle Lanka, Best Life International, and Tiens Lanka Health Care. • Qnet/Questnet, Sport Chain, and Fruugo Online. • Fastwin (Pvt) Ltd, Windex Trading, and Beecoin App. • Regulatory Context: Engaging in or promoting these schemes is a criminal offense. The CBSL warns that these activities pose significant risks to the financial sector and individual consumer savings, often masking themselves as ICT or e-commerce opportunities. • Status: Based on official CBSL determinations as of Feb 26, 2026.
## 📈 AI Governance: A Strategic Imperative for Sri Lanka
The rapid integration of AI across banking, healthcare, and public administration necessitates a robust national governance framework to mitigate escalating ethical and security risks. • Current Global Context Global adoption of AI is accelerating, with major frameworks like the EU AI Act (2024) and Singapore’s Model AI Governance setting international standards. The 2026 data exposure incident involving a senior US CISA official highlights how even "For Official Use Only" data can be compromised via public AI platforms. • Systemic Organizational Risks Data Leakage: Research indicates 8.6% of employees have pasted company data into public tools like ChatGPT, with 4.7% including sensitive source code or client info. Training Vulnerability: Data submitted to public models may be stored and used for future training, leading to potential proprietary knowledge leakage. • Strategic Recommendations for Sri Lanka Framework Alignment: Adopting risk-based regulations similar to the EU and ISO/IEC 42001 standards to ensure global market alignment. Sectoral Guidelines: Establishing specific mandates for high-impact sectors like Finance, Telecom, and Logistics. Secure Alternatives: Moving toward enterprise-grade solutions (e.g., private models) with contractual guarantees on data isolation. • Conclusion Proactive governance is a competitive differentiator. Without it, Sri Lanka faces regulatory misalignment and a potential erosion of public trust in digital government initiatives.
Sri Lanka to Enact Digital Economy & Cyber Security Laws 📈
The Government is set to introduce two landmark legislations this year—the Digital Economy Act and the Cyber Security Act—to formalize the nation's digital transformation and establish a secure legal framework for a tech-driven economy. • New Authorities & Frameworks • Establishment of the Digital Economy Authority to integrate all Ministries and State institutions into a unified digital ecosystem. • Formation of the Cyber Security Authority to oversee protection standards for public infrastructure and digital systems. • Both Bills are in final drafting stages and are expected to be presented to Parliament within 2026. • Economic & Digital Goals • Target to grow the digital economy to US$ 15-30 Bn by 2030 (approx. 12-14% of GDP). • Increase digital sector foreign exchange earnings from US$ 1.6 Bn to US$ 5 Bn by 2030. • Budgetary allocation of Rs. 30 Bn to drive transformation, with Rs. 16.5 Bn specifically for the Ministry. • Strategic Initiatives • Launch of a national digital identity card and a consolidated "Super App" for State services. • ICT/BPM and GovTech focus to enhance public service efficiency (already tripled for certain certifications). • Digitization of agriculture (CROPIX), health, and education sectors to formalize rural economic activity. • Governance Outlook While the move seeks to coordinate policy, analysts warn of potential bureaucratic layers and high administrative costs by creating new bodies rather than reforming existing institutions like ICTA or SLCERT.
### ⚖️ Court Orders Trial Against Foreign Broker Over NITF Reinsurance Tender
The Fort Magistrate’s Court has overruled preliminary objections by international firm Tysers Insurance Brokers Ltd., fixing a trial date for alleged violations of the Regulation of Insurance Industry Act. • Core Dispute: Tysers is accused of securing a major reinsurance tender from the National Insurance Trust Fund (NITF) without being duly registered under Sri Lankan law. The tender covers Strike, Riot and Civil Commotion (SRCC) insurance claims. • Financial Impact: The reinsurance contract for the 2024/2025 period involves a premium calculated at approximately Rs. 1 Billion. • Legal Violation: Local brokers, led by Strategic Insurance Brokers Ltd., argued that Section 92 of the Act prohibits any entity from conducting insurance business or acting as an agent in Sri Lanka without local registration. Tysers reportedly used George Steuart Ltd. as an agent during the bid process. • Next Steps: The Fort Magistrate held that the legal bar against unregistered entities applies. The trial is set for March 25, 2026. If found guilty, the firm faces potential fines or imprisonment under the regulatory framework governing the insurance sector.
National Capital Markets Symposium to Strengthen Regulatory Framework 📈
The Bar Association of Sri Lanka (BASL) will host the National Capital Markets Symposium on February 26, 2026, focusing on the legal and regulatory evolution of the country's securities sector. • Core Objective: Strengthening the integrity of Sri Lanka's capital markets to restore investor confidence and support sustainable economic recovery. • Key Thematic Areas: • Regulatory functions of the Securities and Exchange Commission (SEC) and the Colombo Stock Exchange (CSE). • Listing requirements, capital formation, and issuer compliance obligations. • Enforcement strategies regarding insider trading and market manipulation (e.g., wash trades and false market activity). • Transparency, timely disclosure, and fair trading practices. • Strategic Importance: The forum aims to bridge the gap between legal expertise and market perspectives, ensuring a resilient ecosystem for listed companies, investment advisers, and investors. • Key Participants: Senior officials from the SEC and CSE, legal practitioners, and financial leaders, emphasizing that a predictable legal framework is vital for attracting global capital and protecting stakeholders.
📈 Modernizing Financial Recovery: Sri Lanka’s New Insolvency Law
Sri Lanka is set for a landmark structural shift with the proposed Rescue, Rehabilitation and Insolvency Law. Moving away from the 1853 Ordinance, the bill shifts the focus from simple liquidation to business continuity and economic stability. • Strategic Objectives The framework aims to preserve enterprise value and protect employment by providing viable businesses a "second chance." It aligns Sri Lanka with global standards, crucial for boosting investor confidence following recent economic restructuring. • Core Pillars of the Bill Corporate Rescue: Introduces an administration regime allowing a temporary pause on creditor actions to facilitate restructuring negotiations. SME Support: Tailored mechanisms specifically for MSMEs to ensure the recovery process is accessible for smaller enterprises. Personal Insolvency: A shift for individuals, offering structured debt protection and rehabilitation orders before bankruptcy. Regulatory Oversight: Establishment of an independent Insolvency Regulatory Authority to professionalize practitioners and maintain high standards. • Economic Impact & Implementation The law addresses the high NPL (Non-Performing Loan) environment by creating predictable outcomes for creditors. Key challenges include the need for specialized training for the judiciary and balancing the new "moratoriums" with the rights of secured lenders. _Status: Based on provisional legislative drafts as of February 2026._
Tourism Paradox: Rising Arrivals vs. Leaking Revenue 📈
Opposition MP Dr. Harsha de Silva has highlighted a "tourism paradox" where surging visitor numbers are not translating into proportional economic gains for Sri Lanka. • Revenue Leakage: Foreign nationals are reportedly operating unlicensed cafes, bars, and surf camps on tourist visas. Payments are often processed through overseas platforms, preventing income from entering the local economy. • Regulatory Gaps: The MP stressed that all operators must adhere to the same rules regarding licences, local employment, and taxes to ensure fair competition and fiscal benefit. • Overtourism & Environment: Concerns were raised regarding excessive visitor volumes at ecologically sensitive sites like Yala and UNESCO-listed Sigiriya, threatening long-term sustainability. • Strategic Shift: The MP advocates for a "quality over quantity" approach to sustainable tourism to mitigate pollution and congestion while protecting cultural assets.
Cabinet Approves Updated National Tariff Policy to Boost Trade Coherence 📈
The Cabinet of Ministers has approved a revised National Tariff Policy to align Sri Lanka’s trade framework with current economic and fiscal conditions. The move follows a comprehensive review aimed at improving transparency and legal compliance. • Core Objective: To establish a predictable and coherent tax system that supports trade, investment, and fiscal management. • Key Revisions: The update addresses misalignments with recent economic data and ensures consistency with existing tax laws and statutory provisions. • Regulatory Oversight: The review incorporated specific recommendations from the Committee on Public Finance (COPF) to remove administrative complexities and ensure adherence to legal requirements. • Economic Impact: The policy aims to strengthen the ICT/BPM, manufacturing, and export sectors by providing a more transparent tariff structure, crucial for national employment and economic diversification. The implementation was approved following a resolution by the President in his capacity as the Minister of Finance, Planning, and Economic Development.
CBSL Revives Banking Sector Consolidation for Smaller Players 📈
The Central Bank of Sri Lanka (CBSL) has reintroduced a consolidation framework aimed at strengthening the banking sector's credit profiles and capital buffers. • Overall Strategy: The framework targets licensed banks with assets below LKR 400 Bn. While the immediate system-wide impact is expected to be modest—affecting banks representing less than 5% of sector assets—it aims to create better-capitalized institutions capable of handling larger exposures. • Implementation & Timeline: A scoring system will evaluate banks from 1 January 2026 to 31 December 2027. Institutions scoring below 60% may face mandatory consolidation. • Key Sector Moves: • Momentum is already visible with the expected acquisition of HDFC Bank (Rating Watch Positive) by Bank of Ceylon. • State Mortgage & Investment Bank (SMIB) is expected to be acquired by People’s Bank. • Consolidation is likely to focus on the 13 licensed commercial banks and 6 licensed specialized banks currently operating in the domestic market. • Economic Impact: Fitch Ratings suggests that merging smaller, niche-model banks with larger, established peers will improve cost efficiency and market confidence. However, success depends on managing recapitalization needs and potential asset quality issues during integration. • Status: Based on Fitch Ratings analysis of the 2026-2027 CBSL framework.
## 📈 UN Support for Cyclone-Hit MSMEs in Sri Lanka
A high-level delegation from the UNDP and UNCDF recently concluded a visit to Sri Lanka (Feb 16–20) to establish a sustainable financing framework for businesses impacted by Cyclone Ditwah. • Core Objective: Designing a financially responsible mechanism to support recovery for micro, small, and medium-scale industrialists (MSMEs) following the cyclone's impact. • Strategic Focus: Risk Mitigation: Enhancing the capacity of small businesses to withstand future shocks. Financial Literacy: Improving economic resilience and recovery capabilities for entrepreneurs. Credit Support: Collaboration with the National Credit Guarantee Institution (NCGIL) and the Industrial Development Board (IDB) to facilitate access to capital. • Key Stakeholders: The initiative is a joint effort between the Ministry of Industry and Entrepreneurship Development and UN agencies, involving the Small Enterprise Development Division (SEDD) and the National Enterprise Development Authority (NEDA). • Context: This framework aims to build long-term economic stability for the MSME sector, which is critical for national employment and regional economic diversification post-disaster.
IRD Launches Privilege Card Scheme for Tax-Compliant Individuals 📈
The Inland Revenue Department (IRD) has introduced a new reward system to recognize high-value and compliant individual taxpayers through a tiered Privilege Card program. • Eligibility Criteria Taxpayers must have submitted their Return of Income by the deadline (typically 30 Nov) and settled all self-assessment payments, including Advanced Income Tax (AIT) and Withholding Tax (WHT), within stipulated timelines for the preceding Year of Assessment. • Tiered Reward System Gold Card: Awarded to individuals with annual income tax payments of Rs. 5 million or above. Silver Card: Issued to those who have paid between Rs. 3 million and Rs. 5 million. • Exclusive Benefits Priority Access: Dedicated entry to meet the Commissioner General and senior management. Personalized Service: Assignment of a nominated officer from Tax Services Units and on-site tax consultancy if required. Recognition: Provision of a vehicle sticker and an exclusive elegant logo brooch. • Deadlines & Application For 2026, applications are accepted until 28 February 2026 (extended from the usual Jan 31 deadline). Submissions require a copy of the Return of Income, NIC/Passport, and T-10 Certificate where applicable. Cards are typically issued within three weeks of approval.
### Coal Tender Controversy: Ministry Admits Quality Shortfall 📈
Agriculture Minister K.D. Lalkantha has officially acknowledged the supply of inferior quality coal under a recent state tender, but denied any fraud or corruption in the procurement process. The government maintains that transparent procedures were followed. • Key Admissions & Quality Issues Minister Lalkantha confirmed reports of substandard coal are "true." Opposition Leader Sajith Premadasa alleged the 9th shipment from a South African supplier is also below standard. Real-time data reportedly shows power output from this shipment dropped to 250–275 MW, well below the expected 300 MW per unit at the Norochcholai plant. • Financial & Operational Impact Loss Recovery: The government claims established criteria will be used to recover financial losses from suppliers. Economic Risk: The Opposition warns of increased fuel consumption, potential machinery damage, and higher costs for the energy sector, which could burden consumers. Previous Allegations: Opposition MPs previously estimated losses from the coal tender at approximately Rs. 8 Billion to Rs. 10 Billion. • Procurement Stance The administration defends the current process as more structured than previous "Cabinet-led" selections. Details on the supplier’s identity, total volume, and specific financial impact remain undisclosed (based on provisional data).
Sri Lanka's Pension Reform: A Blueprint for Social Justice 📈
A new policy perspective highlights the shift from political pension debates to a sustainable national framework. The proposal emphasizes a transition from discretionary benefits to a structured, two-pillar system to ensure long-term fiscal stability. • Core Framework: Proposed dual-structure: 1. State Pension: A contributory fund based on National Insurance, replacing the current tax-funded burden. 2. Employment-Based Pension: Strengthening existing models like the EPF (20% total contribution) with tax-incentivized voluntary schemes. • Key Economic Proposals: Retirement Age: Uniform eligibility at 65 years for both genders to ensure fund sustainability. Caregiver Recognition: Credits for up to 16 years of unpaid childcare, recognizing parenting as a national service. Integration: Merging Aswesuma, Samurdhi, and elderly allowances into a unified, actuarially-sound national system. • Governance & Equity: Legislative Reform: Eliminating disproportionate pensions for politicians with minimal service years. Sector Specifics: Specialized schemes for healthcare, police, and armed forces to remain transparent and proportionate to service. Sustainability: Moving away from politically motivated handouts toward rational, data-driven social safety nets.
📈 SEC & SLAASMB Partner to Bolster Financial Governance
The Securities and Exchange Commission of Sri Lanka (SEC) and the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) have signed a Memorandum of Understanding (MOU) to enhance oversight of financial reporting and auditing standards within the capital market. • Strategic Scope: The formal framework covers entities licensed under the SEC Act, including stock exchanges, brokers, dealers, unit trusts, fund management companies, and listed companies. • Oversight Roles: • The SEC will scrutinize annual reports for regulatory compliance and disclosure requirements under Sri Lanka Accounting Standards (LKASs/SLFRSs). • The SLAASMB will focus on verifying compliance with both Accounting and Auditing Standards. • Key Collaborative Measures: • A structured information-sharing mechanism to exchange findings on material non-compliance, regulatory decisions, and investigative outcomes. • A formal referral system for complaints regarding financial reporting and auditing. • Joint public awareness initiatives to promote transparency and corporate governance. • Impact: This alliance aims to strengthen market integrity and investor confidence by ensuring more rigorous financial reporting and auditing oversight across Sri Lanka's financial services sector.
### 📈 EU Demands US Adherence to Trade Pact After Supreme Court Ruling
The European Commission has called for "full clarity" from Washington, insisting that the U.S. honor the terms of last year’s bilateral trade agreement following a disruptive weekend of tariff hikes. • The Conflict: Following a U.S. Supreme Court ruling on Friday that struck down global tariffs, President Trump imposed temporary 10% across-the-board levies, which were further increased to 15% a day later. • The Agreement: Under the existing pact, the U.S. capped tariffs on most EU goods at 15%, with specific exemptions (0% tariffs) for sectors like aircraft and spare parts. In exchange, the EU removed duties on various U.S. goods. • Economic Impact: • The EU warns that unpredictable tariffs are undermining global market confidence. • The Commission insists on maintaining the previously agreed "all-inclusive ceiling" to ensure "fair and balanced" trade. • For Sri Lanka’s export-oriented economy, particularly in apparel & textiles and tea, heightened volatility in Transatlantic trade relations often signals broader global supply chain instability and shifting demand in Western markets. • Next Steps: EU Trade Commissioner Maros Sefcovic has initiated discussions with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick to resolve the breach of the "deal is a deal" stance.
Court of Appeal Restores Tourist Tuk-Tuk Licensing Framework 📈
The Court of Appeal has intervened to preserve the legal framework allowing foreign tourists to drive three-wheelers in Sri Lanka using International Driving Permits (IDP). • Legal Status: The court granted Interim Orders (C.A. Writ 1154/25) reversing a November 2025 directive that suggested tourists could no longer drive tuk-tuks. The ruling restores the status quo ante, upholding Sri Lanka’s obligations under the 1949 Geneva Convention on Road Traffic. • Regulatory Framework: Foreign visitors with a valid IDP may lawfully drive upon obtaining a local covering permit from the Department of Motor Traffic or the Automobile Association of Ceylon. This is a statutory requirement, not an administrative concession. • Economic Impact: The court noted that a sudden change in policy would adversely affect tourism business operations and the livelihoods of hundreds of Sri Lankan families dependent on the leisure and transport sector. • Sector Focus: The decision protects the tourism industry’s diversification, specifically the niche self-drive tuk-tuk market which has become a popular attraction for international travelers. _Status: Based on Court of Appeal Interim Orders; final legal determination pending._
### 📈 US Global Tariff Hike to 15%: Impact on Sri Lankan Exports
Following a US Supreme Court ruling, President Trump has announced an increase in the universal import tariff from 10% to 15%. This move, effective immediately, utilizes "Section 122" powers for a 150-day period. Key Trade Developments: • Global Tariff Rate: Raised to the legal maximum of 15%, up from the 10% rate proposed just 24 hours prior. • Legal Basis: The shift follows a court ruling that found previous higher tariffs under "economic emergency" laws exceeded presidential authority. • Duration: The 15% rate is valid for 150 days; extending it requires approval from the US Congress. Implications for Sri Lanka & Regional Trade: • Apparel & Textiles: As the US is a primary market for Sri Lankan apparel, a 15% across-the-board tariff adds significant cost pressure to exports, potentially affecting competitiveness against nations with specific trade deals. • Exemptions: The White House noted exemptions for critical minerals, metals, and energy products, which may offer limited relief to specific industrial niches. • Regional Benchmarks: Neighbors like Malaysia and Cambodia remain at negotiated rates of 19%, while countries without deals (like Brazil) may see rates drop from 40% to the 15% cap temporarily. Market Outlook: • Uncertainty remains high as the US administration explores investigations into "unfair trade practices" to impose further product-specific taxes. • Political opposition in the US and global pushback (notably from Germany and France) suggest a volatile trade environment for South Asian exporters in the coming months.
🚨 Police Launch Crackdown on Unlicensed Foreign Drivers 📉
Sri Lanka Police have initiated a special operation in the Southern Province to prosecute foreign nationals driving without valid licenses and the business operators who provide them vehicles. • Legal Enforcement Authorities are targeting the unauthorized rental of motorcycles, three-wheelers, and cars. Under the Motor Traffic Act, legal action will be taken against both the driver and the vehicle owner/lessor if valid documentation is not verified. • Safety Statistics (2025 – Present) The crackdown follows a rise in tourist-related road incidents: Fatalities: 5 foreign nationals killed in 2025. Serious Accidents: 7 recorded so far in 2026. Other Incidents: 78 minor accidents and 6 cases of vehicle damage reported. • Mandatory Requirements To drive legally, foreign nationals must possess one of the following: An International Driving Permit (IDP). A Sri Lankan driving permit for foreign residents. A temporary conversion certificate issued by the Department of Motor Traffic (DMT). • Economic Context The move aims to protect the tourism sector—a vital source of foreign exchange—by reducing road risks that could tarnish the country’s safety reputation.
Govt. Revitalizes "Communication to the Village" Project to Expand 4G Coverage 📈
The Cabinet has approved a revised reimbursement framework to accelerate Sri Lanka's telecommunications infrastructure development, specifically targeting underserved rural areas. • New Funding Model: The TRCSL will now reimburse mobile service providers the lower of either Rs. 35 million per tower or 75% of the actual construction and equipment costs. • Project Status: Since 2021, 83 communication towers have been completed. The project aims to bridge the digital divide by incentivizing operators who previously faced high costs and low revenue in remote regions. • Economic Context: The revised guidelines account for the recent decline in equipment prices, making the expansion of ICT infrastructure more financially viable for private partners. • Strategic Goal: Managed under the Digital Economy ministry, the project focuses on ensuring countrywide 4G broadband access to support rural participation in the digital economy and enhance national connectivity. _Note: Based on official Cabinet briefing and TRCSL guidelines._ ---
⚖️ US Supreme Court Rules Trump Tariffs Illegal: Relief for SL Exports 📈
The US Supreme Court ruled 6-3 on Friday that President Donald Trump’s administration violated federal law by unilaterally imposing sweeping global tariffs. The court held that the International Emergency Economic Powers Act (IEEPA) does not grant the President authority to bypass Congress to levy taxes/tariffs. • Overall Impact: The ruling effectively invalidates "reciprocal" tariffs (ranging from 10% to 50%) applied to nearly all US trading partners in 2025. Over US$ 130 Bn in collected duties are now under scrutiny, though the court has yet to mandate specific refund procedures. • Key Sector Benefits for Sri Lanka: • Apparel & Textiles: Major reprieve for Sri Lanka’s top export earner. Previous unilateral tariffs of 20% had threatened to make garments uncompetitive against regional rivals. • Rubber Products: Significant relief for the sector, which faced effective rates of 20.2%, risking a projected 42% decline in US-bound exports. • Tea & Seafood: Removal of the baseline "emergency" duties restores previous market access levels for these vital food exports. • Strategic Context: The US is Sri Lanka's largest single export destination, accounting for roughly 23% of merchandise exports. This ruling mitigates a projected US$ 634 Mn loss in annual export revenue and protects thousands of jobs in the apparel sector. • Remaining Risks: Sector-specific tariffs under Section 232 (Steel, Aluminum, Autos) remain in effect. President Trump has already signaled plans to use Section 122 for a new 10% global tariff, which allows a 150-day window without prior Congressional approval. _Note: Impact is based on current legal standing; executive countermeasures are expected._
📈 Social Security Boom for Transport Sector
The Ministerial Consultative Committee on Transport, Highways and Urban Development has approved key recommendations to bring the informal transport sector into the formal social security fold. • Overall Strategy: Sub-committee reports identify solutions for professional security and new business models within the transport industry. • Major Reform: Proposed EPF and ETF contributions for: • Private bus drivers and conductors. • Three-wheeler drivers. • App-based workers (electronic platforms). • Regulatory Updates: Parliament approved Extraordinary Gazettes No. 2463/04 and 2467/52, revising driving license fees and extending validity periods to mitigate recent technical and weather-related disruptions. • Context: This move aims to provide "professional recognition" and long-term financial safety to thousands of workers currently outside the formal economy.
## 🏥 Sri Lanka’s Vision 2030: Digital Healthcare & Insurance Transformation
The Insurance Regulatory Commission of Sri Lanka (IRCSL) has outlined a strategic roadmap to modernize the national health infrastructure, aiming to become the first South Asian nation to fully adopt ICD-11 standards by 2030. 📈 • The Digital Shift The initiative focuses on implementing a unified Electronic Health Record (EHR) system. This seeks to eliminate current inefficiencies where fragmented data and manual coding lead to resource misallocation and high insurance claim disputes. • Key Sector Impacts Insurance: Move toward "Health Age" premium calculations rather than chronological age. Standardized ICD-11 coding will allow for real-time claim verification, reducing fraud and administrative costs. Healthcare: Integration of both modern medicine and Ayurveda into digital platforms, making traditional treatments eligible for global insurance recognition. ICT/BPM: Opportunities for AI-driven health analytics to forecast disease trends and personalize insurance products for low-income segments. • Economic Benefits Potential to save billions of rupees annually by cutting healthcare wastage. Improved "health-secure" status to attract medical tourism and research collaborations. Transition from a "claim-settler" model to a preventive healthcare ecosystem. • Implementation Strategy Based on provisional planning, the IRCSL recommends a phased rollout in tertiary hospitals, seeking partnerships with the World Bank and ADB. Success depends on mandating ICD-11 across all providers and establishing standardized hospital billing to prevent overcharging. 🇰🇵
## Microfinance Bill 2025: Regulatory Gaps & Community Concerns 📈
The Microfinance and Credit Regulatory Authority Bill (gazetted Nov 2025) has entered Parliament, drawing criticism for excluding public input and threatening grassroots financial systems. While aimed at curbing predatory lending, experts warn it reproduces flaws of the failed 2023 draft. • Core Regulatory Framework New Authority: Establishes the Microfinance and Credit Regulatory Authority of Sri Lanka to license all moneylenders and microfinance institutions (MFIs). Licensing Barrier: Requires village "death donation" and mutual aid societies to register as companies or NGOs, risking the criminalization of informal community credit. CRIB Expansion: Proposes extending Credit Information Bureau reporting to grassroots levels, potentially locking low-income borrowers out of all formal and semi-formal credit. • Key Issues & Sector Impact Consumer Protection: Critics note the lack of a mandatory interest rate cap and weak safeguards against violent debt recovery—major drivers of the recent household debt crisis. Gender Exclusion: Despite women being the primary users of microfinance, the Bill only mandates one female representative on the board, ignoring calls for 50% representation. Sector Risk: High administrative thresholds may dismantle non-profit, community-led credit models that currently serve as lifelines for the "uncreditworthy." • Current Legislative Status Progress: Read for the first time on Nov 26, 2025. Missing Window: The 14-day window for Supreme Court challenges lapsed during Cyclone Ditwah, limiting judicial review to post-enactment amendments.
## Construction Sector: Cabinet Approves Shift to ‘Fine Aggregate’ 🏗️
The Cabinet of Ministers has approved a strategic transition to substitute the term river sand with fine aggregate across all construction specifications and guidelines. This move aims to address acute supply shortages and mitigate environmental degradation. • Regulatory Change: In accordance with the Construction Industry Development Act, materials sifted through a 4 mm sieve—including M-Sand, crushed rock fines, and offshore sand—will now be formally categorized as fine aggregate. • Economic Impact: The construction industry has faced rapid price hikes and financial pressure due to stringent mining regulations and transportation restrictions on river sand. This policy provides a standardized legal framework for cost-effective alternatives. • Scope & Implementation: Applicability: Primarily targets tender-based and contract-based projects. Standards: Guidelines for high-quality industrial blends will be detailed in an upcoming gazette. Origin: The proposal was driven by industry stakeholders to ensure long-term sustainability and resource availability.
Sri Lankan Exporters Gain Strategic Entry to Saudi Market 📈
Sri Lanka has concluded its first-ever virtual workshop focused on navigating the Saudi Food and Drug Authority (SFDA) regulatory landscape, aiming to boost high-potential food and beverage exports. • Trade Performance: Saudi Arabia became Sri Lanka’s 23rd largest export destination in 2025, with earnings reaching a record US$ 137.85 Mn (up 13.3% YoY). Total bilateral trade expanded by 9% in the same period. • Key Sectors: Over 80 companies focused on fisheries, poultry, processed foods, fruits & vegetables, beverages (including king coconut water), and herbal products participated to address compliance and registration bottlenecks. • Market Access: The initiative, supported by the Export Development Board (EDB), follows the 2025 launch of the first Saudi-Sri Lanka Business Council. It aligns with Saudi Vision 2030, targeting a more diversified export basket beyond traditional tea (which currently holds a major market share). • Compliance Support: SFDA experts provided technical guidance on facility approvals, product registration, and inspection processes to facilitate smoother clearance at Saudi ports. Based on provisional 2025/26 trade data.
📈 Meta Youth Trial Update: Zuckerberg Testifies Amid Global Backlash
Meta CEO Mark Zuckerberg testified in a Los Angeles court regarding allegations that Instagram and Facebook target children and harm mental health. This landmark case tests the liability of tech giants for platform design. • Overall Legal Dispute: A California woman alleges Meta and Google's YouTube fueled her depression and suicidal thoughts. Internal documents revealed Instagram aimed to "win big with teens" by attracting them as "tweens," despite public claims that users under 13 are prohibited. • Platform Metrics & Revenue: • Teens on Instagram contribute less than 1% of total revenue. • Internal 2026 milestones projected daily user time to increase to 46 minutes (up from 40 in 2023). • Zuckerberg attributed the responsibility of age verification to mobile device makers rather than app developers. • Local Economic Context: In Sri Lanka, the ICT/BPM sector is a key growth driver, with services exports reaching US$ 3.57 Bn in 2024. As the island nation implements the Online Safety Act, global litigation outcomes could influence local digital marketing standards and platform accountability for the 9.00 million active social media users in the country. • Global Context: Australia and Florida have already enacted bans for users under 16 and 14, respectively. This trial’s verdict may erode long-standing legal protections that shield tech companies from liability regarding user-generated content and platform design. _Note: Based on ongoing trial proceedings and provisional data._
📈 Port City Act Amendments Boost Investor Confidence
The 2026 revisions to the Colombo Port City Economic Commission (CPCEC) Act have been implemented to align Sri Lanka’s Special Economic Zone with global standards, significantly enhancing the ease of doing business through regulatory clarity. • Governance & Investment Framework The amendments establish a predictable statutory framework for Businesses of Strategic Importance (BSI). Key features include defined minimum investment thresholds, mandatory employment creation targets, and structured performance monitoring to reduce discretionary risks for large-scale capital investments. • Banking & Financial Oversight Banking operations within the Port City are now under a single, coherent regulatory framework led by the Central Bank of Sri Lanka (CBSL). • Simplified approval processes for CBSL-licensed banks to open branches. • Expanded scope for offshore banking activities to drive international financial services. • Clearer supervisory authority to eliminate regulatory overlap. • Real Estate & Land Momentum Market demand remains strong with two major land lease agreements concluded in January 2026: • ICC Port City (Pvt) Ltd: Developing a luxury marina residential project for high-net-worth individuals and expats. • IFC Colombo 1 (Pvt) Ltd: A mixed-use development integrating commercial, retail, and residential components. These reforms reinforce the Port City's position as a secure, globally competitive urban ecosystem designed to attract foreign direct investment and high-value employment.
New Microfinance Bill Approved to Regulate Lending 📈
The Committee on Public Finance (COPF), chaired by Dr. Harsha de Silva, has approved the Microfinance and Credit Regulatory Authority Bill. This legislative move aims to overhaul the microfinance and money lending sectors to ensure stability and consumer protection. • Regulatory Oversight: The Bill establishes the Sri Lanka Microfinance and Credit Regulatory Authority. No individual or entity can operate a money lending or microfinance business without a formal license issued by this new body. • Digital Lending: The Authority’s purview explicitly includes online lending activities. All digital lenders must be licensed, addressing rising concerns over unregulated fintech platforms. • Interest Rate Caps: The Authority is vested with statutory powers to determine maximum interest rates for both lending and deposits, aimed at preventing predatory lending practices while preserving savings instruments. • Decentralization & Tech: To assist small-scale lenders, limited powers (such as application processing) will be delegated to Divisional Secretariats. The COPF emphasized the necessity of a robust IT system to manage this decentralized rollout. • Consumer Protection: A primary objective is protecting vulnerable borrowers. The Ministry of Finance has been directed to launch public awareness campaigns and FAQs to clear up mistrust regarding these legislative reforms. _Note: E-commerce operators are currently excluded from the scope of this Act._
Low Global Integration Favours Sri Lanka Under EU 'Buy European Only' Policy 📈
The EU’s move toward strategic autonomy via a 'Buy European Only' policy may inadvertently benefit Sri Lanka due to its low integration into high-tech global supply chains. According to Frontier Research, the policy prioritizes EU-produced goods in strategic sectors, but current impacts on Sri Lanka remain indirect. Key Economic Insights • Core Exports Safe: Traditional sectors like tea, rubber, and apparel & textiles are not currently targeted as the EU remains highly reliant on these consumer goods. • GSP+ Dependency: Export earnings face a direct threat only if the policy dilutes GSP+ preferences; however, no clarity on such changes has been provided yet. • Strategic Opportunity: Protectionism in high-tech may cause low-tech manufacturing to "trickle down" to Sri Lanka as China and ASEAN focus on restricted high-tech fields. • Tech Barriers: If Sri Lanka shifts into ICT/BPM, medical services, or electronics, stricter EU eligibility rules could create significant market access barriers. Priority EU Sectors • The policy specifically targets high-value industries: Defence, AI, Space, Quantum Technology, Clean Tech, and Payment Systems. _Note: Analysis based on provisional research data regarding EU strategic shifts as of February 2026._
New Investment Framework: Beyond Tax Holidays 📈
The Sri Lankan Treasury has introduced a new scheme targeting tourism, manufacturing, agriculture, and educational technologies with tax holidays of 6–10 years. • Investment Thresholds: Minimum requirements range from US$ 50 Mn to US$ 300 Mn, with job creation targets between 100 and 250 positions. • Tourism Sector: Projects must reach a US$ 300 Mn minimum to qualify for the maximum 10-year tax relief. • Structural Challenges: Despite these incentives, experts warn that "red tape," opaque bureaucracy, and inconsistent policies remain significant barriers compared to regional competitors. • Proposed Reforms: The focus is shifting toward long-term enablers rather than fiscal concessions: • Establishing a "single-window" digital approval mechanism. • Strengthening legal safeguards and property rights. • Ensuring macroeconomic stability to offset exchange rate volatility. • Investing in infrastructure (logistics/ports) and human capital. _Note: Analysis suggests that while tax holidays signal intent, deep institutional reform is required to attract high-quality, sustainable global capital._ ---
EDB Promotes UK Market Expansion via DCTS 📈
The Sri Lanka Export Development Board (EDB) conducted an awareness session on 11 February 2026 to help exporters leverage the UK’s Developing Countries Trading Scheme (DCTS). • Key Market Opportunity The UK remains Sri Lanka's second-largest export destination. Under the DCTS (effective from 1 Jan 2026), over 92% of Sri Lankan product lines qualify for duty-free access, enhancing competitiveness in a major global market. • Sector Breakthrough: Apparel & Textiles Apparel manufacturers—representing 73% of exports to the UK—now enjoy a "game changer" advantage. They can source up to 100% of raw materials (including synthetic fabrics) globally while maintaining zero-tariff access, removing previous regional sourcing constraints. • Regional Sourcing & Diversification Beyond apparel, sectors like ICT/BPM, tea, and rubber benefit from the Asia Regional Cumulation Group. This allows Sri Lanka to source inputs from 18 countries and still qualify for preferential UK tariffs, supporting supply chain flexibility. • Strategic Impact • Tariff Savings: Estimated potential to save over £69 Mn annually if fully utilized. • Trade Growth: Experts project an incremental export boost of US$ 150 Mn to US$ 300 Mn in the medium term. • Simplified Procedures: Removal of the "double transformation" rule and streamlined documentation to reduce compliance costs.
Major Shareholders Reduce Stakes in Cargills Bank 📈
Related parties of Cargills Bank PLC have disposed of a combined 10.05% stake in the market to align with regulatory requirements. The move follows a CBSL directive to reduce the Cargills Group voting interest to 15% by 2029. • Transaction Breakdown: Cargills (Ceylon) PLC: Sold 6.05% for Rs. 509.3 Mn. CT Holdings PLC: Sold 4.00% for Rs. 337.5 Mn. Trading Range: Shares were transacted between Rs. 8.90 and Rs. 9.70. • Shareholding Post-September 2025: Cargills (Ceylon) PLC: 37.09% (Lead shareholder). CT Holdings PLC: 23.62%. Public Holding: 39.14%. • Strategic Context: The divestment is a critical step for the banking sector entity to meet CBSL corporate governance standards regarding ownership diversification. Cargills Bank must also raise capital to meet the Rs. 20 Bn minimum requirement by 2029.
### CEB Proposes 13.56% Electricity Tariff Hike for 2Q 2026 📈
The Ceylon Electricity Board (CEB) has submitted a formal proposal to the PUCSL requesting a 13.56% increase in electricity tariffs for the second quarter (April 01 to June 30, 2026). This follows a rejected 1Q revision due to procedural delays. • Financial Impact The CEB estimates a total deficit of Rs. 15,847 million for the period. Total projected costs stand at Rs. 136.5 billion against a revenue of Rs. 116.9 billion at current rates. • Generation Mix (Total: 4,578 GWh) Hydro: 1,218 GWh (26.6%) Thermal: 1,957 GWh (42.7%) Renewables: 1,402 GWh (30.6%) • Sales Forecast Total sales are estimated at 4,230.3 GWh. Direct CEB sales account for 3,774.7 GWh, while sales to LECO are projected at 455.6 GWh. • Proposed Domestic Unit Rates 0–30 units: Rs. 4.50 to Rs. 5.11 31–60 units: Rs. 8.00 to Rs. 9.08 61–90 units: Rs. 18.50 to Rs. 21.01 Over 181 units: Rs. 61.00 to Rs. 69.27 The revision aims to ensure financial stability and supply reliability, particularly as the sector undergoes restructuring and manages costs from previous weather-related infrastructure damages. The PUCSL will now review the proposal and seek public feedback before a final decision.
Probe Expands into Unchecked Container Release at Colombo Port 📈
The Parliamentary Select Committee (PSC) met for three consecutive days last week to expedite investigations into the unauthorized release of 323 containers from the Colombo Port. The probe focuses on the bypass of mandatory physical inspections, a critical breach of customs protocol. • Core Findings & Evidence: Senior officials, including Sri Lanka Customs Director General Seevali Arukgoda, provided evidence regarding the clearance process. The investigation seeks to identify accountability for the release of these "red-flagged" containers without required security checks. • Committee Oversight: Chaired by Justice Minister Harshana Nanayakkara, the PSC aims to conclude the inquiry within three months. The committee is tasked with submitting policy recommendations to reform logistics and port administration to prevent future revenue loss or security risks. • Key Leadership Changes: Ports and Civil Aviation Minister Anura Karunathilaka has officially resigned from the committee. A replacement member is expected to be appointed shortly to maintain the cross-party composition of the 12-member panel. _Note: Investigations are ongoing based on provisional evidence recorded from customs and port authorities._
ICAO Pledges Technical Support for Sri Lanka’s Aviation Growth ✈️
• International Collaboration: The International Civil Aviation Organization (ICAO) has assured continuous support to maintain Sri Lanka’s aviation industry as safe, efficient, and sustainable. This comes ahead of a critical international audit scheduled for later this year. • Industry Outlook: ICAO Regional Director Tao Ma noted that the global aviation industry is projected to grow threefold over the next 20 years. He highlighted that developing the necessary human resources to meet this expansion will be a primary challenge for the region. • Compliance & Standards: The Civil Aviation Authority of Sri Lanka (CAASL) was commended for maintaining standards in alignment with ICAO regulations. Technical guidance will be provided to ensure the country successfully navigates the upcoming 2026 audit. • Human Capital & Leadership: • Rehan Wanniappa was designated as an ICAO Global Champion for the Asia-Pacific. • Prabath Kularathna and Dr. Upuli Sachithra were appointed as Sri Lankan Ambassadors. • Several retired Directors General were felicitated for their contributions to infrastructure and safety advancements. • Diplomatic Engagement: Discussions were held with the Minister of Ports and Civil Aviation to strengthen bilateral ties and ensure the long-term sustainability of the transport and tourism nexus. 📈
Fisheries Crisis Averted: President Steps In 📈
President Anura Kumara Dissanayake has intervened to resolve a nine-day Satyagraha protest by madel (beach seine) fishermen, following a high-level meeting at the Presidential Secretariat. • The Core Dispute: Fishermen had been protesting a government ban on using tractor-mounted winches for hauling nets. While operators cite labor shortages, the government and environmentalists raised concerns over ecological damage and the impact on approximately 37,000 small-scale fishers. • Key Outcomes: • Immediate Suspension: Protesters officially called off their strike following the discussion. • Joint Action Plan: All parties agreed to propose a balanced solution within a short period to protect livelihoods without compromising marine safety. • Follow-up Talks: Formal negotiations involving all stakeholders are scheduled to commence this Monday. • Financial Relief: Agreement was reached to involve the Ministry of Finance to address leasing and payment issues faced by mechanized operators during the transition. • Sector Context: The fisheries sector remains a vital economic pillar, contributing roughly 1.9% to GDP. The government is currently prioritizing the National Fisheries and Aquaculture Policy to balance modernization with sustainable resource management.
## Universal High-Speed Broadband Target Set for 2029 📈
The Sri Lankan government has outlined a strategic timeline to provide all citizens with high-speed connectivity by 2029, addressing key infrastructure gaps in the ICT/BPM and digital sectors. • Infrastructure Requirements Capacity Expansion: Nationwide capacity must increase by 25% to ensure universal access, specifically targeting schoolchildren. Tower Rollout: 100 new towers are scheduled for installation in 2024. However, between 600 and 1,000 additional towers are required to meet full demand. Connectivity Gap: While current internet coverage is at 98%, officials clarified this does not yet equate to high-speed broadband standards. • Commercial & Regional Strategy Private Sector Role: A commercial model for tower deployment will be developed, allowing private sector participation via a bidding process. Digital Literacy: The Sectoral Oversight Committee emphasized strengthening digital literacy outside Colombo, utilizing District Secretariat offices for coordination. • Budgetary Oversight The plans were reviewed during 2026 Budget allocation discussions for the Ministries of Digital Economy and Science and Technology.
Armenia Launches Temporary Visa-Free Entry for 113 Countries 📈
Armenia has announced a temporary visa exemption effective until July 1, 2026, aimed at boosting tourism and enhancing international business travel connectivity. • Eligibility Criteria: Residents of 113 countries holding valid residence permits from the US, EU Member States, Schengen Area, or GCC countries (UAE, Bahrain, Qatar, Saudi Arabia, Kuwait, and Oman) can enter visa-free. • Stay Conditions: Eligible visitors can stay for up to 180 days within a one-year period, provided their residence permit is valid for at least six months upon entry. • Market Context: The move follows a significant growth trend in Armenia's travel and hospitality sector. • January 2026 arrivals: 179,409 (up 28.6% YoY). • 2025 total arrivals: 2.26 million (up 2.5% YoY). • Economic Impact: This policy is designed to encourage spontaneous travel and longer exploratory journeys, potentially benefiting service exports and global connectivity for residents in high-income regions, including the Middle East.
TPA Conditions GSP+ Support on Land Rights & Equality 📈
The Tamil Progressive Alliance (TPA) has urged the European Union to link the continuation of GSP+ trade concessions to verifiable progress in human rights and land security for the Malayaga Tamil community. During high-level talks in Colombo, the TPA emphasized that preferential market access must depend on ending the "structural exclusion" of plantation workers. • Key Demands & Rights The TPA, led by MP Mano Ganeshan, highlighted that GSP+ credibility relies on the actual implementation of international conventions. Demands include secure land titles, an end to modern slavery-like conditions in supply chains, and the inclusion of Malayaga Tamil families in the national Rs. 5 million housing scheme, rather than inferior recovery frameworks. • Sector Impact The community remains the backbone of the tea and apparel & textiles sectors—Sri Lanka's primary export earners. Despite the apparel sector topping US$ 5.01 Bn (+5.42% YoY) and tea earnings reaching US$ 1.51 Bn (+4.74% YoY) in 2025, the TPA reports persistent intergenerational poverty and landlessness among these workers. • Trade Context The EU remains Sri Lanka's second-largest export market. Currently, 61% of exports to the EU utilize GSP+ benefits. While the government seeks to re-apply for the facility after the current cycle ends, the TPA warns that ignoring minority land rights and labor dignity undermines the governance logic of the agreement.
### US Tariffs: Sri Lanka Faces Regional Competitiveness Gap 📈
The Opposition has raised concerns over Sri Lanka's current trade position, noting that the country now faces higher US import duties on apparel compared to its regional peers. This follows recent trade deals secured by competitors that have realigned the South Asian export landscape. • Comparative Tariff Rates India: 18% (following a recent interim trade framework). Bangladesh: 19% (reduced from 20% under a new reciprocal agreement). Sri Lanka: 20% (current reciprocal rate as of February 2026). • Impact on the Apparel Sector Garments constitute approximately 70% of Sri Lanka’s total exports to the US. The 20% tariff, while lower than the initially proposed 44%, remains a significant barrier compared to the concessions secured by India and Bangladesh. Industry analysts warn that even a 1-2% difference in duties can shift major orders to regional alternatives, threatening the 300,000+ jobs within the apparel & textiles industry. • Economic Risks Based on provisional projections, the sector could face potential export losses of up to US$ 220 Mn annually under the 20% regime. Competitors like Bangladesh have also secured "zero-tariff" clauses for specific goods made with US-sourced raw materials, further widening the competitiveness gap. _Note: This summary is based on current market data and official statements as of February 13, 2026._
Parliament Flags Discrepancies in Lakvijaya Coal Shipments 📈
The Sectoral Oversight Committee (SOC) on Infrastructure has raised serious concerns over inconsistencies in documentation for coal shipments at the Lakvijaya Power Plant. • Key Quality Issues: Plant reports for the first three shipments recorded a Gross Calorific Value (GCV) below 5,900 kcal/kg, failing to meet standard fuel quality requirements. • Documentation Gaps: Data from load and discharge ports reportedly do not align with findings at the plant level, casting doubt on the reliability of Indian laboratory certifications. • Financial Impact: While penalties were recouped for the first shipment, energy losses from subsequent shipments are deemed non-recoverable. The PUCSL has been directed to calculate the total financial loss caused by using low-quality coal. • Audit Recommendations: The Committee urged the immediate reinstatement of pre-2023 registration frameworks for the Lanka Coal Company (LCC), as recommended by the Auditor General. • Next Steps: The Energy Ministry is to engage an independent laboratory for fresh testing, and action is sought against officials who failed to brief the Cabinet on audit warnings. This oversight aims to safeguard energy sector efficiency and protect consumers from the broader economic impact of procurement irregularities. _(Based on provisional committee reports)_
CBSL Issues Stern Warning Against Local Foreign Currency Transactions 🏛️
The Central Bank of Sri Lanka (CBSL) has issued a public warning regarding unauthorized foreign currency transactions between residents, reiterating that the Sri Lankan Rupee is the sole legal tender for domestic trade. • Regulatory Mandate: Under the Central Bank of Sri Lanka Act, No. 16 of 2023, all transactions between residents must be settled in local currency unless specifically authorized under the Foreign Exchange Act. • Prohibited Activities: Merchants are strictly barred from accepting foreign currency payments from local customers. This includes converting Rupees into foreign currency for credit to foreign currency accounts via Credit or Debit cards. • Legal Consequences: Violators (both payers and merchants) face summary trial before a Magistrate. Convictions carry severe penalties: • A fine up to Rs. 25 million. • Imprisonment for a term up to 3 years. • Or both penalties combined. • National Context: These measures are designed to preserve the integrity of the monetary system and ensure the stability of the domestic currency market. The CBSL urges the business community and the public to comply with statutory requirements to avoid legal action. _Source: Central Bank of Sri Lanka (February 2026)_
SLTDA Withdraws Controversial LGBTIQ Tourism Support 📈
The Attorney General informed the Court of Appeal yesterday that the Sri Lanka Tourism Development Authority (SLTDA) will formally withdraw a letter endorsing projects aimed at promoting and developing LGBTIQ tourism. • Legal Challenge: The withdrawal follows a writ petition filed by groups including the Federation of National Organizations, challenging the legality of the endorsement issued in September 2025. • SLTDA Position: Chairman Buddhika Hewawasam issued a new communication on February 2, 2026, revoking the support to avoid "ambiguity or misinterpretation" regarding the national tourism mandate and institutional integrity. • Industry Context: While the initial letter recognized the potential for market diversification and DE&I (Diversity, Equity, and Inclusion) programs, the government has since clarified that official policy remains focused on cultural heritage, wellness, and adventure experiences. • Current Status: Despite the withdrawal, petitioners argued that the underlying decision had not been formally rescinded. The Court of Appeal has fixed the next hearing for March 4, 2026, to clarify the state's final position.
📈 US-Bangladesh Trade Deal: Implications for Regional Apparel Hubs
Bangladesh has secured a strategic trade agreement with the US, granting zero-tariff access for specific clothing items, a move that reshapes competitive dynamics for South Asian exporters, including Sri Lanka. • Key Tariff Revisions • Headline tariff on Bangladeshi goods cut from 20% to 19%. • Introduction of a zero-tariff mechanism for apparel produced using US-sourced cotton and man-made fibers. • Quota volumes for duty-free entry will be linked to the scale of Bangladesh’s textile imports from the US. • Regional Context & Competition • Bangladesh remains the world's second-largest apparel exporter, with the sector accounting for 80%+ of its export revenue and 4Mn jobs. • The new 19% rate places Bangladesh nearly on par with India (18%), while Sri Lanka currently faces a higher negotiated rate of 20% (down from an initial 44%). • Analysts warn that the "zero-tariff loophole" gives Bangladesh a significant pricing edge over regional peers who rely on non-US raw materials. • Reciprocal Market Access • In exchange, Dhaka will provide "significant preferential access" for US agricultural and industrial goods, including chemicals, medical devices, car parts, and meat. • Bangladesh will also align with US standards for food, drug, and vehicle emissions to facilitate easier entry for American products.
Tariff Overhaul: Sri Lanka Begins Consultations on Four-Band Policy 📈
The Government of Sri Lanka has officially commenced stakeholder engagements to implement the 2026 Budget proposals for a significant tariff system overhaul. The initiative aims to align the domestic economy with global value chains and boost competitiveness. • Key Reform Pillars The reform introduces a simplified Four-Band Tariff Policy with standard Customs Import Duty (CID) rates of 0%, 10%, 20%, and 30%. This replaces the current complex structure to ensure international consistency and transparency. • Phase-out of Para-tariffs A major highlight is the planned removal of para-tariffs, specifically Cess and the Port and Airport Development Levy (PAL). This move is intended to reduce the "anti-export bias" and lower production costs for domestic manufacturers. • Sectoral Impact & Standards • Apparel & Textiles: Proposed removal of the Rs. 100/kg Cess on imported fabric, replacing it with VAT to create a level playing field for local producers. • Agriculture: Imported coconut and palm oil will shift from a Special Commodity Levy (SCL) to the standard VAT/SSCL framework. • ICT/BPM & Manufacturing: Simplified import procedures for capital goods and raw materials are expected to facilitate trade and technological integration. • Global Alignment The new structure follows the United Nations Broad Economic Classification (BEC) Revision 5. Technical guidance is being provided by the World Bank to ensure the transition supports fiscal sustainability and export diversification. _Note: Reforms are primarily slated for implementation by April 2026 based on provisional budget timelines._
Sri Lankan Postgraduate Enrollments in UK Drop 36% Amid Dependants Ban 📈
A significant downturn has been recorded in the number of Sri Lankan students pursuing postgraduate studies in the UK for the 2024/25 academic year, driven primarily by tightened immigration policies. • Overall Decline: International postgraduate enrollments in the UK fell by 10% YoY, contributing to a 6% drop in total international student numbers (approx. 685,565 students). • Sri Lanka Impact: Sri Lanka saw a 36% YoY reduction in postgraduate enrollments, the second-largest decline globally after Nigeria (-39%). • Key Driver: The drop is directly linked to the 2023 ban on dependants for taught postgraduate courses. Sri Lankan applicants historically maintained high dependant-to-main-applicant ratios, making the restriction a major deterrent for family-oriented students. • Shift in Trends: Postgraduate Research: Enrollments in research-oriented courses (exempt from the ban) rose 11% globally as students pivot away from taught degrees. Market Diversification: Students are increasingly opting for alternative destinations or research-based tracks to maintain family accompaniment and better employment prospects. • UK Market Share: Despite the dip, postgraduate studies still comprise 57% (approx. 389,000) of all international enrollments in the UK. _Data based on ApplyBoard Insights and HESA reports as of February 2026._
📈 Cabinet Approves National Mineral Policy 2026
The Cabinet of Ministers has approved the National Mineral Policy 2026, a modernized framework designed to overhaul the sustainable management of Sri Lanka’s mineral wealth. Replacing the outdated 1999 policy, the 2026 version focuses on maximizing national benefit and economic transparency. • Strategic Focus & Value Addition The policy prioritizes transitioning from raw material exports to high-value mineral-based industries. Key objectives include developing a comprehensive mineral resource database and promoting local processing for minerals like graphite, quartz, and mineral sands to boost foreign exchange earnings. • Regulatory & Environmental Reforms • Land Ownership: Establishes new mechanisms to resolve ownership disputes during extraction. • Enforcement: Introduction of a special unit to curb illegal mining and ensure unpaid royalties are recovered. • Sustainability: Aligns with the national “A Thriving Nation – A Beautiful Life” manifesto, emphasizing rehabilitation and minimal environmental impact. • Current Status & Sector Impact Based on provisional data, the government has temporarily suspended licenses for heavy mineral exploration (e.g., ilmenite, rutile, zircon) until the new guidelines are gazetted and presented to Parliament. This "reset" aims to increase the sector’s export contribution, which currently stands at approx. US$ 389 Mn against a potential of US$ 778 Mn. • Investment Outlook The framework seeks to attract foreign technology partners through transparent licensing and joint ventures, moving Sri Lanka up the global mineral value chain.
CC Calls for Nominations to RTI Commission Member Post 📈
The Constitutional Council (CC) has officially called for nominations from civil society organizations to fill a vacancy for the post of member of the Right to Information (RTI) Commission, in accordance with the Right to Information Act No. 12 of 2016. • Eligibility Criteria: Nominees must be individuals of eminence with proven knowledge and experience in: - Law and Governance - Public Administration - Social Services and Journalism - Science & Technology or Management • Strict Restrictions: To maintain the commission's independence, candidates must NOT: - Be a Member of Parliament, Provincial Council, or Local Authority. - Hold any public or judicial office or office of profit. - Be connected to any political party. - Be engaged in any active business or profession. • Submission Details: - Deadline: On or before 15 February 2026. - Method: Via registered post to the Constitutional Council Office, Parliament of Sri Lanka, or via email to constitutionalcouncil@parliament.lk. - Form: Available on the official Parliament website (www.parliament.lk). This appointment is vital for ensuring transparency and accountability within public authorities, supporting the professional oversight of information access in Sri Lanka.
Port City Offshore Banking Rules Tightened 📈
The Colombo Port City Economic Commission (Amendment) Act, No. 1 of 2026 has significantly revised the offshore banking framework, restricting license access and clarifying regulatory oversight. • Offshore Banking Licenses: Under the new law, eligibility is now strictly limited to foreign-incorporated banks. Locally licensed banks are no longer permitted to apply for offshore licenses under Part VIII of the Act. • Licensing Requirements: Eligible foreign banks must obtain three distinct approvals: a general business license, offshore company registration, and a specific offshore banking license. • Regulatory Oversight: The Central Bank of Sri Lanka (CBSL) retains full supervisory and prudential authority. This includes setting liquidity requirements, minimum capital, and leverage ratios in accordance with international standards. • Enforcement: The CBSL is empowered to issue directions and recommend the suspension or revocation of licenses to the Minister of Finance if prudential standards are breached. • Impact on Local Banks: Banks already licensed under the Banking Act operating within the Port City are excluded from this specific Part VIII regime. EY Sri Lanka notes that local institutions must reassess the Act's applicability to their operations on a case-by-case basis. The amendment underscores a clear separation between domestic activity and specialized offshore banking to enhance the Port City's alignment with global financial norms.
Sri Lanka Formally Launches Digital Nomad Visa to Boost Forex Inflows 📈
The Government has officially rolled out its Digital Nomad Visa (DNV), allowing foreign remote professionals to reside in Sri Lanka for one year with annual renewal options. The initiative aims to enhance ICT knowledge exchange and increase tourism expenditure. • Financial Requirements: Applicants must demonstrate a minimum monthly foreign remittance of US$ 2,000. For more than two dependents, an additional US$ 500 per dependent is required. • Fees & Validity: The visa is issued for 12 months at a cost of US$ 500 per person (applicant, spouse, and dependents). • Key Benefits: Holders can open local bank accounts, rent property, and enroll children in private schools. They are encouraged to participate in ICT/BPM programs and co-working spaces. • Restrictions: Holders are strictly prohibited from local employment; all income must be derived from foreign sources. Tax registration with the Inland Revenue Department is mandatory for renewals. • Operational Status: Applications are live on the Immigration Department website. The first official visa will be ceremonially issued at BIA this Monday (16). Based on official government rollout data.
Sri Lanka Boosts National Cyber Resilience via NCSOC Integration 🛡️
The Government has initiated the integration of critical State institutions into the National Cyber Security Operations Centre (NCSOC), moving cyber security from a technical concern to a pillar of national security and economic stability. • Implementation Timeline: Following Cabinet approval, the second phase of the project is underway, with the goal of connecting all remaining government institutions by the end of 2026. • Strategic Focus: Priority is given to institutions managing critical information infrastructure. These entities will undergo audits by the National Audit Office to ensure accountability and effective risk management. • Key Capabilities: The NCSOC will provide State institutions with: • Real-time threat monitoring • Early warning systems • Coordinated incident response to counter ransomware and data breaches. • Economic Impact: As the country transitions toward a digital economy, this initiative is framed as a vital investment in institutional credibility and the protection of essential public services. • Governance & Training: The move includes mandatory digital security awareness and training programs for all public sector officials to foster a culture of cyber resilience.
## Cabinet Approves Key Tax & AML Law Revisions 📈
The Cabinet of Ministers has cleared the publication and gazetting of three critical legislative amendments aimed at bolstering fiscal integrity and financial transparency. The bills will soon be tabled in Parliament for final approval. • Inland Revenue Act No. 24 of 2017: Amendments incorporate tax revisions initially approved in May 2025. These changes focus on strengthening the national tax structure and improving State revenue mobilisation. • Financial Transparency & AML: The Cabinet approved revised drafts of the Financial Transactions Reporting (Amendment) Bill and the Prevention of Money Laundering (Amendment) Bill. • Strategic Objectives: • Strengthening revenue administration and fiscal stability. • Enhancing Sri Lanka’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) frameworks. • Aligning national law with international transparency standards to support the broader economic recovery. • Current Status: Proposals submitted by the Minister of Finance, Planning, and Economic Development have been greenlit for gazetting; parliamentary tabling is the next immediate step.
📈 Three New Laws to De-Risk Private Capital by 1Q 2026
The Sri Lankan government plans to table three critical bills by March/April 2026 to formalize the growth framework and attract private capital, according to Senior Economic Adviser Duminda Hulangamuwa. • Investment Framework: New legislation will focus on investment protection, a formal Public-Private Partnership (PPP) framework, and State-Owned Enterprise (SOE) reforms to reduce policy risk and provide predictability for large-scale projects. • Fiscal Performance: Sri Lanka recorded a primary surplus of 3.9% of GDP last year, significantly exceeding the IMF benchmark of 2.3%. Official reserves grew from US$ 6 Bn to US$ 6.8 Bn by the end of 2025. • Debt Sustainability: Claims of post-2028 debt distress were rejected. Annual foreign debt servicing is projected at approximately US$ 3 Bn through 2036, a level deemed manageable given that US$ 3.2 Bn was successfully paid last year. • Sector Growth: • Tourism: Identified as a central pillar; focus shifting toward product diversification and infrastructure (airport and expressway expansion). • Shipping & Logistics: Plans include expanding port capacity and developing a dry port near Colombo to enhance transshipment operations. • SOE Reform: A new bill will establish a holding company structure to improve transparency and operational independence, with potential for partial listings. • Economic Outlook: While 4–5% growth is expected "naturally," the government is targeting higher, policy-led expansion to ensure long-term stability without resorting to money printing or tax cuts.
📈 Sri Lanka Jumps 14 Places in Global Corruption Index
Sri Lanka has recorded a significant improvement in the 2025 Corruption Perceptions Index (CPI), signaling a positive shift in public sector integrity and governance. • Overall Performance 2025 Score: 35/100 (Up from 32 in 2024). Global Rank: 107th out of 180 countries (Improved by 14 places from 121st). Status: Remains below the global average score of 43, despite the 3-point increase. • Sectoral Insights The rise reflects improved perceptions among experts and business leaders regarding the integrity of the public sector. Key assessment areas include the effectiveness of prosecution, strength of legal frameworks, and whistleblower protections. Economic stability and governance reforms, particularly in tax exemptions and asset declaration systems, remain critical to maintaining this trajectory. • Global Context Top Performers: Denmark (89), Finland (88), and Singapore (84). Bottom Performers: South Sudan (9) and Somalia (9). Historical Note: Sri Lanka’s 2025 score of 35 is an improvement from its "worst-ever" rank in 2024 but remains below its 10-year high of 40 (recorded in 2012).
Sri Lanka to Mandate SIM Re-Registration for Older Connections 📈
The Cabinet of Ministers has approved new regulations to re-register subscriber information for mobile SIM cards issued before August 2, 2019. This move, proposed by the President as Minister of Digital Economy, aims to bridge data gaps in the ICT/BPM and telecommunications sectors. • Core Mandate: All SIM cards obtained prior to the 2019-08-02 cutoff must undergo re-registration to ensure service providers have complete and accurate subscriber data. • Security & Legal Rationale: The update addresses significant challenges in judicial proceedings and criminal investigations caused by missing or outdated user information. • New Provisions: • Formal registration protocols for subscribers aged 16–17 years. • Streamlined regulations for issuing SIM cards to foreign nationals visiting Sri Lanka. • Regulatory Context: These amendments update the Subscriber SIM Card Registration Regulations No. 01 of 2019, issued under the Telecommunications Act No. 25 of 1991, which previously only applied to newer connections. _Note: Operational timelines for the re-registration process are expected to be announced by the TRCSL and telecommunication providers following the gazetting of these regulations._
⚖️ Supreme Court Sentences Lawyer to 3 Years for Contempt
The Supreme Court of Sri Lanka has sentenced attorney-at-law Priyantha Jayathunga to a 3-year prison term following a conviction for contempt of court. • Sentence & Custody: The three-year custodial sentence is effective from 1 July 2024, accounting for the period the respondent has already spent in remand. • The Incident: The proceedings were initiated after the attorney, while appearing before the Court, accused three sitting Justices of suppressing the truth and acting with malice. He further alleged they had committed offenses under Section 289 of the Penal Code. • Judicial Ruling: A three-judge bench, including Justices Shiran Gooneratne, Achala Wengappuli, and Priyantha Fernando, ruled that the elements of contempt were fully established. • Legal Context: The case underscores the judiciary’s strict stance on maintaining the integrity of the legal profession and protecting the court from scandalous allegations that undermine public confidence in the administration of justice.
Sri Lanka’s Digital Shift: Growth vs. Governance Risks 📈
The 2026 budget has allocated Rs. 30 Bn to accelerate Sri Lanka's digital transformation, focusing on Digital Public Infrastructure (DPI). However, analysts warn of a "rights vacuum" and "efficient authoritarianism" if technical rollout precedes legal safeguards. • Overall Figures & Timeline • Total Budget: Rs. 30 Bn (approx. US$ 98 Mn) for 2026 initiatives. • Digital ID (SL-UDI): Rs. 2.2 Bn allocated; launch expected by Q3 2026. • Start-up Fund: Rs. 1.5 Bn (US$ 5 Mn) to catalyze the ICT/BPM ecosystem. • The Digital Divide Based on UNDP data, a significant gap threatens to "hard-wire inequality": • 39% of households remain offline. • 34% gender gap in internet use. • Disability Gap: Only 7% of persons with disabilities have internet access, vs. 24% of the general population. • Key Risks & Sector Impacts • Governance: The Online Safety Act (OSA) and biometric collection proceed without vernacular (Sinhala/Tamil) documentation, risking the exclusion of linguistic minorities. • Disaster Management: Evidence suggests 2025 cyclone fatalities were exacerbated by a 12-hour delay in Tamil-language warnings. • Apparel & Textiles/Finance: Move toward a cashless society (waiving fees on gov payments < Rs. 5,000) lacks "analogue alternatives" for those with low digital literacy. • Policy Recommendations Experts urge donors to condition disbursements on: • Trilingual Transparency: Simultaneous release of all DPI documents. • Legal Safeguards: Fully operational Data Protection Authorities before data collection. • Inclusive Consultations: Documented engagement in Northern and Eastern provinces. _Note: Summary based on provisional 2026 budget data and recent socio-economic analysis._
Port of Colombo Marks 20 Years of MEGAPORT Security Partnership 🛡️
The Sri Lanka Ports Authority (SLPA) celebrated two decades of collaboration with the MEGAPORT Initiative, a critical global security program focused on preventing the illicit trafficking of nuclear and radiological materials. • Strategic Milestone: Established in 2006, the Port of Colombo was the first in South and Southeast Asia to adopt this initiative, aligning with UN Security Council Resolution 1540. • Technology & Operations: The program utilizes advanced radiation detection systems to interdict illicit materials while maintaining the maritime hub's trade competitiveness. • Collaborative Framework: Operations are managed by the SLPA and Sri Lanka Customs, with ongoing technical assistance, equipment, and training provided by the US National Nuclear Security Administration (NNSA). • Security Network: Security personnel across all major terminals—including JCT, SAGT, CICT, CECT, and CWIT—serve as Local Alarm Station operators to ensure seamless surveillance. This partnership remains a cornerstone of Sri Lanka’s maritime security and its role in safeguarding international trade routes.
⚠️ Lessons for Sri Lanka: Tragic Death During Indian Tax Raid
The recent death of Confident Group Chairman C. J. Roy during an Indian Income Tax search operation serves as a critical warning for Sri Lanka's evolving fiscal landscape. As the Inland Revenue Department (IRD) intensifies enforcement under IMF-linked targets, the incident highlights the high personal stakes of non-compliance. • Risks for Taxpayers: Non-compliance is no longer just a financial risk; it carries severe psychological and reputational consequences. Sri Lankan taxpayers are urged to view compliance as a "shield" for personal stability and dignity. • Tightening Net: With the introduction of digital TINs, bank transaction reporting, and integrated property databases, the "compliance net" in Sri Lanka is tightening. Authorities warn that silence today does not guarantee safety tomorrow. • Operational Ethics: The tragedy underscores that tax enforcement must be firm yet proportionate. Experts call for: • Clear, written search protocols and senior-level oversight. • Documented communication over informal verbal pressure. • Guaranteed access to professional representation. • Policy Balance: For sustainable revenue growth, the system must balance enforcement with fairness. Fear-based compliance is fragile; building trust through voluntary disclosures and humane practices is essential for long-term fiscal health. Summary based on reports as of Feb 9, 2026. ---
### 📈 Excise Department Reaches Consensus on Digitalisation and Modernisation
All trade unions within the Excise Department have officially agreed to a comprehensive digitalisation and modernisation programme aimed at boosting national revenue collection. The consensus follows high-level discussions at the Presidential Secretariat to streamline operations and enhance transparency. • Revenue & Efficiency: The primary objective is to increase excise revenue collection by improving departmental efficiency through technology. This includes implementing new reforms and a robust digitalisation process. • Modernisation Initiatives: The programme focuses on the Revenue Administration Reform and Modernization Bureau’s proposals to transition from manual to digital systems, addressing longstanding gaps in tax collection. • Officer Welfare: Beyond technology, the plan incorporates human resource development and the welfare of officers to ensure smooth implementation and long-term sustainability. • Stakeholder Alignment: The agreement involves the Director General of Excise, Mr. M. B. N. A. Premarathne, and representatives from all trade unions, signaling a unified approach to fiscal reform. _Status: Based on official reports from the Presidential Secretariat._ ---
🚨 Probe Launched Into Ambuluwawa Cable Car Project
The Ministry of Environment has initiated a formal investigation into alleged irregularities surrounding the proposed cable car project at the Ambuluwawa Biodiversity Complex, following a joint inspection led by Minister Dr. Dammika Patabendi. Construction remains suspended pending a final decision. • Key Irregularities: Preliminary findings suggest violations of the National Environmental Act, including the failure to publish mandatory Gazettes or newspaper notifications during the approval process. Allegations surfaced that a full Environmental Impact Assessment (EIA) was bypassed in favor of a basic study, despite the area's ecological sensitivity. • Land & Legal Disputes: The Department of Wildlife Conservation reported unauthorized construction on its lands. A complaint has been filed with the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) against the Central Environmental Authority (CEA) for alleged procedural bypasses. • Environmental Impact: The site hosts 428 species, including 69 endemic and 58 nationally threatened species. Concerns were heightened following environmental damage reported after Cyclone Ditwah. • Next Steps: An expert committee will be appointed to review technical concerns and legal compliance before determining the project's future. 📈
Customs Union Meeting Disrupts Port Operations 📈
Private sector stakeholders have raised concerns over a sudden halt in cargo clearance yesterday, as officers at Sri Lanka Customs suspended work to attend a union meeting. • Overall Impact: Import and export operations effectively came to a standstill starting around 1:00 p.m. While Colombo-based officers attended the meeting, outstation staff reportedly awaited instructions, causing a localized paralysis of trade logistics. • Operational Update: A Customs spokesperson confirmed a two-hour afternoon meeting but stated that duties resumed shortly after. The specific agenda of the union meeting remains undisclosed by the administration. • Industry Concerns: The private sector warned that even brief stoppages trigger a "domino effect," resulting in: • Increased demurrage and terminal charges. • Disruption of tightly scheduled supply chains. • Delays for time-sensitive shipments, affecting the apparel & textiles and perishable sectors. The incident underscores the continued vulnerability of Sri Lanka’s external trade to internal administrative disruptions, despite ongoing efforts to enhance border agency predictability.
### 📈 Advocata Urges Permanent End to Vehicle Permit "Privilege Culture"
The Advocata Institute has strongly cautioned the government against reviving vehicle import permits, warns that exempting high-ranking officials threatens reform credibility and public trust. • Current Status: Despite a broader import ban affecting ordinary citizens, 1,900 permits have been issued to senior officials under concessional schemes, with 563 permits issued in 2025 alone. • Budget 2026 Commitment: President Anura Kumara Dissanayake declared an end to the "permit culture" during the 2026 Budget, yet recent discussions regarding retired officials suggest potential reversals. • Fiscal Impact: Duty-free permits represent significant revenue loss. Historical data shows tax waivers per MP have ranged from Rs. 66 million to Rs. 98.5 million in today’s terms. • The "Privilege" Gap: While officials seek exemptions, the general public faces some of the world's highest effective taxes on personal transport vehicles, with duties ranging from 125% to 250%. • Recommendations: • Abandon all plans to allow imports under existing duty-free permits. • Replace discretionary perks with transparent, on-budget salary structures. • Legislate a permanent prohibition to prevent future policy reversals. Based on provisional parliamentary statements and 2026 Budget proposals.
Sri Lanka Approves 5-Year Renewable Energy Roadmap 📈
The Cabinet of Ministers has officially cleared the Renewable Energy Resources Development Plan 2025–2030. This strategic framework is designed to transition the national grid toward sustainable sources, ensuring energy security and long-term climate resilience. • Core Targets: Aiming to meet 70% of national electricity demand via renewable energy by 2030, with a long-term goal of total carbon neutrality by 2050. • Strategic Focus: Identifying and prioritizing suitable land for green projects and establishing a comprehensive Renewable Energy Map and Renewable Energy Gardens across the island. • Diversification: Key emphasis on developing floating solar projects to optimize land use and expanding the solar and wind energy footprint. • Implementation: Prepared by the Sri Lanka Sustainable Energy Authority (SLSEA), the plan sets a clear timeframe for energy park development and addresses environmental concerns, including human-elephant conflict, through stakeholder consultations. • Economic Impact: Aims to reduce heavy reliance on expensive fossil fuel imports, aligning with the national shift toward a green economy to support industrial stability and ICT/BPM sector growth. _Note: Plan based on statutory requirements of the SLSEA Act No. 35 of 2007._
📈 HRCSL Warns of Threats to Freedom of Expression
The Human Rights Commission of Sri Lanka (HRCSL) has expressed deep concern over emerging threats to freedom of expression, specifically targeting the ability of journalists to report on matters of public interest without interference. • Misuse of Police Powers: The Commission highlighted a growing trend of law enforcement investigating allegedly defamatory speech, despite defamation being decriminalized in Sri Lanka since 2002. Police have no legal authority to investigate complaints that fall strictly under civil jurisdiction. • Procedural Violations: A recent inquiry into journalist Tharindu Jayawardena—regarding reporting on corruption and public funds—violated a 2025 IGP circular. The directive requires officers to clearly disclose the basis for any summons, which was not done in this instance. • Online Safety Act (OSA) Concerns: The HRCSL raised serious questions regarding the constitutionality of the Online Safety Act. It warned that the law is being deployed to suppress dissent rather than addressing genuine online harms like phishing or malware. • Constitutional Standards: The Commission reiterated that freedom of expression protects speech even if it "shocks or disturbs" the State. It reminded public figures that international standards require them to tolerate a higher degree of criticism than private citizens. • Recommendations: The HRCSL called for a moratorium on the Online Safety Act and urged authorities to stop using criminal processes for civil defamation matters to prevent public frustration and social unrest.
IRCSL Extends Sanasa Life Insurance Suspension to March 2026 📈
The Insurance Regulatory Commission of Sri Lanka (IRCSL) has extended the temporary suspension of Sanasa Life Insurance Co. PLC until 3 March 2026. The move restricts the company from issuing new long-term insurance policies while it addresses regulatory concerns. • Regulatory Timeline: Initial suspension began on 5 December 2025. The latest extension follows a previous deadline of 31 January 2026. Registration remains suspended under Section 18 of the Regulation of Insurance Industry Act. • Key Reasons for Action: The regulator cited the company's inability to meet the required solvency margin. Issues regarding the provision of inaccurate data and non-compliance with regulatory orders. Action taken to protect the interests of policyholders and the national financial services sector. • Company Financials & Ownership: Net Asset per share: Rs. 22.61 (as of Sept 2025). Top Shareholders: Senthilverl Holdings (19.10%) and Sanasa Federation (10.50%). The company must still fulfill obligations to existing policyholders despite the freeze on new business.
### 📉 MSMEs Call for Relief Amid Record Bank Profits & Tax Gains
The Ceylon Federation of MSMEs highlights a stark disparity where the banking sector and the Treasury thrived while small businesses collapsed due to high interest rates. • The Interest Shock: In April 2022, policy rates surged by 100%, pushing the Average Weighted Prime Lending Rate (AWPLR) from ~10% to nearly 30% by December 2022. This tripling of costs led to widespread defaults. • Windfall Gains (2023/2024): • Banking Sector Profit Before Tax (PBT): Rs. 762 Billion. • Government Tax Revenue from Banks: Rs. 295 Billion. • The Federation argues these gains were effectively "transferred" from struggling entrepreneurs. • The 'Moratorium Trap': Lack of clear CBSL guidelines on interest capitalization allowed banks to reschedule loans to their advantage, often compounding interest opaquely while using Parate Execution threats. • Proposed Relief Roadmap: • Refund excess interest collected (May 2022 – Nov 2024) for older loans. • Use the Rs. 295 Billion in tax revenue to provide tax credits to banks for these refunds. • Immediate suspension of CRIB and NPL listings for post-Easter attack victims. • Enact binding legislation to ensure mandatory borrower protection. The Federation maintains that the liquidity to save the MSME sector exists within these record-breaking figures.
### 📈 Tiger Global Ruling: Tightening the Net on Tax Avoidance
A landmark January 2026 Indian Supreme Court ruling in Tiger Global v. AAR signals a major shift toward "substance over form," carrying significant implications for cross-border investments and Sri Lanka’s own tax landscape. • The Ruling Highlights The Court denied tax treaty benefits to Mauritius-based entities for the indirect sale of Flipkart shares. Key takeaways include: TRC Limitations: A Tax Residency Certificate is no longer "conclusive proof" of treaty entitlement if the entity lacks commercial substance. Substance Over Form: Authorities can "look through" structures. In this case, control was found to be in the US, not Mauritius. GAAR Supremacy: General Anti-Avoidance Rules (GAAR) can override tax treaties in cases of "impermissible avoidance arrangements." • Comparison: Vodafone vs. Tiger Global Vodafone (2012): Favored taxpayers, emphasizing literal interpretation and legal form. Tiger Global (2026): Favors tax authorities, prioritizing economic reality and value creation over "paper situs." • Implications for Sri Lanka Section 35 (IRA): Sri Lanka’s Inland Revenue Act contains similar GAAR provisions, empowering the Commissioner General to disregard "artificial or fictitious" schemes. Indirect Transfers: Under local law, shares in non-resident companies are deemed "domestic assets" if >50% of their value derives from land or buildings in Sri Lanka. Precedent: The ruling may embolden Sri Lankan authorities to more aggressively scrutinize multi-tiered offshore structures used for ICT/BPM or real estate investments. _Note: Analysis based on provisional January 2026 judicial data._ ---
Govt. Considering Vehicle Imports for Retired Officials 🚗
The Government is currently discussing the possibility of allowing vehicle imports for high-ranking officials who hold valid concessionary vehicle permits. Economic Development Deputy Minister Nishantha Jayaweera confirmed the move in Parliament yesterday. • Current Status: The vehicle permit scheme for retired senior officials remains active and has not been suspended. • Permit Statistics: A total of 1,900 permits have been issued under this scheme to date, with 563 permits granted during 2025. • Key Developments: Discussions are focused on facilitating imports specifically for those who already hold permits, potentially on a priority basis. • Economic Context: This move addresses long-standing restrictions on vehicle imports while balancing the requirements of senior government administration and retired civil servants. _Note: Based on official parliamentary statements._ ---
📈 President Takes Direct Oversight of AML/CFT Review to Avert Grey-List Risks
President Anura Kumara Dissanayake has intervened to personally oversee Sri Lanka’s Third Mutual Evaluation on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), signaling high-level political ownership to protect the nation’s financial integrity. • The Risks: Failure to meet Financial Action Task Force (FATF) standards risks returning Sri Lanka to the "grey list". This could deter foreign investment, increase compliance costs, and disrupt vital cross-border financial transactions. • Strategic Context: The evaluation, overseen by the Asia/Pacific Group (APG), assesses technical compliance with 40 FATF recommendations and effectiveness across 11 outcomes. Previous lapses led to grey-listing in 2017, which the current administration aims to avoid through "good governance and accountability." • Key Directives: • Legislation: Expedite all pending technical amendments and legal reforms. • Human Resources: Resolve staffing shortages by fast-tracking recruitments and re-engaging experienced retired officers on 1-year contracts. • Stability: A special circular will be issued to retain trained staff in their posts until the evaluation concludes in November 2026. • Timeline: A Special Task Force (STF) must submit a progress report to the President within two weeks. _Summary based on official presidential review and provisional evaluation data._
## 📈 China to Ban Hidden Car Door Handles by 2027
China’s Ministry of Industry and Information Technology has announced a ban on hidden/flush door handles starting January 1, 2027, citing critical safety concerns. This shift impacts the global automotive and EV supply chains, where minimalist designs have become an industry standard. • New Safety Regulations: All vehicles (excluding tailgates) must feature both interior and exterior mechanical releases. This ensures doors remain operable during power failures or post-crash emergencies. • Compliance Timeline: New models must comply by 2027, while previously approved models are granted a two-year extension to phase out existing designs. • Industry Context: Popularized by Tesla in 2012, these handles reduce drag but have faced scrutiny following high-profile accidents, including a fatal crash involving a Xiaomi EV where rescuers could not open the doors. • Global Impact: As the world’s largest EV market and home to BYD (now the global leader in EV sales), China’s regulatory shift will likely force a design pivot across the manufacturing and automotive electronics sectors worldwide. _Note: Based on official MIIT policy announcements as of Feb 2026._ ---
Legal Officers Condemn Pressure Campaigns Against AG ⚖️
The Legal Officers’ Association of the Attorney General’s Department has issued a formal resolution condemning a series of "unfounded and personal attacks" targeting Attorney General Parinda Ranasinghe (Jnr.), PC, and his officers. • Key Concerns Raised: The Association warns that coordinated efforts are being made to exert pressure on the Department, aiming to undermine its professional independence. It specifically noted the systematic misuse of social media to create a false perception of public dissatisfaction. • Impact on State Functions: Persistent intimidation and smear campaigns risk demoralizing state counsel. This could directly impair the Department’s ability to discharge its constitutional responsibilities in the public interest—a critical component for maintaining the rule of law and investor confidence. • Legal Recourse & Accountability: The Association emphasized that while the AG is subject to the rule of law, legitimate grievances should be pursued through established legal avenues rather than "trials by media." • Public Appeal: Stakeholders and the public are urged to refrain from sharing unverified information. The resolution reaffirms the Association's confidence in the AG's leadership amidst these challenges to the administration of justice. _Note: Based on a resolution adopted at a Special General Meeting held on 29 January 2026._
📈 Sri Lanka Moves to Shield Tax Revenue with "Two-Basket" FDI Strategy
As global tax rules shift, Sri Lanka is urged to overhaul its investment incentives to prevent local tax revenue from being siphoned by foreign treasuries. With the OECD’s Global Minimum Tax (GMT) of 15% now active for major economies, traditional tax holidays for large firms are becoming obsolete. • The Pillar Two Challenge Under the OECD framework, Multinational Enterprises (MNEs) with annual revenues over €750 million must pay a minimum 15% tax globally. If Sri Lanka offers a 0% rate, the firm’s home country can collect the 15% "Top-Up Tax," effectively turning Sri Lankan concessions into a "donation" to foreign governments. • Proposed "Two-Basket" Strategy Basket 1 (SMEs): Retain traditional profit-based incentives and tax holidays for smaller investors (under €750M revenue) to drive local employment. Basket 2 (Large MNEs): Shift to cost-based incentives, such as Enhanced Capital Allowances (ECA), to reward actual physical investment rather than paper profits. • Technical Modernization Substance-Based Income Exclusion (SBIE): Leveraging carve-outs for "real" economic activity like factories and payroll. Qualified Refundable Tax Credits (QRTC): Adopting cash-refundable credits—the global "gold standard"—to benefit investors without lowering their effective tax rate below the 15% threshold. • Regional Context Competitors like Vietnam, Thailand, and Singapore are already legislating these "smart" incentives. Experts warn that sticking to blanket tax holidays for large ICT/BPM or manufacturing giants risks making Sri Lanka's fiscal toolkit uncompetitive in a "streaming era."
India Announces 20-Year Tax Holiday for Global AI & Cloud Hubs 📈
India’s 2026-27 Budget introduces aggressive incentives to position the nation as a global leader in AI and ICT/BPM infrastructure, directly impacting regional tech competition. • Tax Incentives: A 20-year tax holiday (until 2047) for foreign cloud providers on revenue from services sold outside India, if delivered via local data centres. • Investment Inflow: Global giants have committed massive capital, including Amazon (US$ 35 Bn), Microsoft (US$ 17.5 Bn), and Google (US$ 15 Bn). Domestic players like Reliance and Adani are also investing billions in AI campuses. • Capacity Growth: India’s data centre power capacity is projected to jump from ~1 GW to 2 GW by 2026, potentially reaching 8 GW by 2030, backed by over US$ 30 Bn in capital. • Semiconductors & Electronics: Budgeted spending for the Electronics Components Manufacturing Scheme increased to INR 400 Bn (from INR 229.19 Bn). A second phase of the India Semiconductor Mission will focus on local chip IP and equipment. • Operational Challenges: Despite the incentives, scaling remains constrained by high electricity costs, power availability, and water stress. _Context_: These moves signal a significant shift in regional digital infrastructure, as India aggressively courts the high-tech manufacturing and data services sectors.
## 📈 Audit Leadership Vacancy: Risks to Fiscal Governance
Sri Lanka remains without a substantive Auditor General since April 2025, raising critical concerns over the country’s fiscal oversight and constitutional administration. A decision on a new appointee by the Constitutional Council is expected today, February 3, 2026. • Core Institutional Role The office provides independent assurance to Parliament on the use of public resources across Government departments, State-Owned Enterprises (SOEs), and local authorities. It is central to maintaining transparency and public confidence in financial management. • Current Governance Impact The 10-month vacancy has disrupted the systemic oversight of public finance. Key areas affected include: Accountability: Identification of financial risks and governance gaps in SOEs. Oversight: Legislative engagement through audit reports which guide corrective policy actions. Global Standing: Adherence to INTOSAI (International Organisation of Supreme Audit Institutions) standards, which mandate institutional independence and security of tenure. • Appointment Criteria & Standards The debate highlights a shift toward prioritizing functional suitability over just professional credentials: Qualifications: While Chartered Accountants have traditionally held the post, international standards emphasize leadership in public-sector audit and ethical independence. Competencies: Knowledge of public finance systems and parliamentary accountability is deemed critical for a "whole-of-government" perspective. Comparative Practice: Jurisdictions like the UK and Canada emphasize proven leadership in public governance to ensure the office remains insulated from political influence. _Note: This summary is based on professional and constitutional perspectives regarding the current vacancy as of February 2026._
📈 Digital Privacy: Legal Risks of Viral Content in Sri Lanka
A socio-legal review warns that Sri Lanka’s culture of viral sharing is creating a "collective complicity" in privacy violations. With over 8.2 million social media users as of 2025, the rapid spread of non-consensual intimate content poses severe risks to individual dignity and national digital trust. • Legal Framework & Penalties Obscene Publications Act: Criminalizes the production, distribution, and possession of "obscene" material. Every "share" or "forward" is treated as a fresh offense. Personal Data Protection Act (PDPA) No. 9 of 2022: Classifies intimate content as "sensitive personal data." Sharing such data without consent is unlawful, shifting the legal focus from "morality" to "individual harm." Liability: Claiming "I did not create the content" provides no legal immunity for those who distribute it. • Socio-Economic Impact Reputational Harm: Victims face secondary trauma and social ostracism, which is particularly severe in the Sri Lankan context of "family honor." Digital Trust: Continued violations erode trust in digital platforms, potentially hindering the ICT/BPM sector and the growth of the digital economy (which accounted for ~5% of GDP in recent years). Media Ethics: Sensationalism by news outlets for "clicks" exacerbates victim trauma and normalizes voyeurism. • Action Plan for Mitigation Enforcement: Rigorous application of the Penal Code and PDPA to deter offenders. Platform Accountability: Urging rapid takedown procedures and stricter moderation by tech giants. Literacy: National campaigns to educate the public that "sharing" is a punishable crime. _Note: Legal provisions under the PDPA are being implemented in phases through 2026._
Sri Lanka Formalizes Night-Time Employment for Women in Key Service Sectors 📈
A new Gazette notification has been issued by the Ministry of Labour, expanding the legal framework for female employment during night hours. This significant amendment to the Shop and Office Employees Act aims to modernize labor regulations and boost the female labor force participation rate, which currently stands at approximately 30%. • Key Regulatory Changes: Women over the age of 18 are now officially permitted to work as janitorial attendants or food service attendants (stewardesses) between 6:00 p.m. and 6:00 a.m. previously, this privilege was largely restricted to ladies' restroom attendants. • Sector Impact: The move primarily benefits the hospitality, tourism, and facility management sectors by allowing businesses like residential hotels and restaurants to operate more flexibly with a diverse workforce. • Employer Mandates: Strict welfare requirements have been imposed on employers engaging women for night shifts, including: Provision of secure transport facilities to the employee's residence. Ensuring suitable accommodation where necessary. Implementation of mandatory health and safety measures. Full accountability for the overall welfare and protection of female staff. • National Context: This follows previous reforms that opened night work for the ICT/BPM and apparel sectors, reflecting a broader shift toward economic diversification and inclusive growth. _Note: Summary based on provisional data from Gazette Extraordinary issued on Jan 30, 2026._
CBSL Cancels Pan Asia Bank's Primary Dealer Licence ⚖️
• Overall Regulatory Action: The Central Bank of Sri Lanka (CBSL) has officially cancelled the Primary Dealer Licence of Pan Asia Banking Corporation PLC (PABC). While the formal notification was issued on 27 January 2026, the cancellation is retroactively effective from 23 October 2025. • Historical Context: This follows a prolonged suspension period that began on 15 August 2017. The initial suspension was linked to investigations into government bond market transactions involving Perpetual Treasuries Ltd. • Impact on Operations: • Regular Banking: No impact; the bank continues its standard commercial banking operations, including deposits and lending. • Securities Trading: PABC remains active in the secondary market for Government securities. • Primary Auctions: The bank is strictly prohibited from participating in primary auctions for Treasury bills and Treasury bonds. • Current Status: The bank confirms that this cancellation will not disrupt its core financial services or its commitment to the banking sector and national economy. _Source: Based on official bank statements and CBSL regulatory filings._
RTIC Orders Disclosure of $54.8M China Development Bank Loan 📈
The Right to Information Commission (RTIC) has directed the External Affairs Ministry to release the loan agreement for the Katana Water Supply Project, rejecting government claims that confidentiality is required for debt restructuring. • Core Ruling: The RTIC ruled that public interest in transparency regarding essential infrastructure outweighs confidentiality concerns. The government must disclose the agreement by 27 February 2026. • Financial Details: The agreement involves a US$ 54.8 Million loan signed in 2017 between the China Development Bank (CDB) and the National Water Supply and Drainage Board. • Transparency Context: While 8 of 9 requested Chinese loan agreements were previously released, this final document was withheld. The RTIC found the state failed to prove that disclosure would cause economic harm or prejudice foreign relations. • Legal Precedent: The Commission linked the right to information to the right to life, citing water as an essential commodity. It warned of prosecution under Section 39 of the RTI Act for non-compliance.
📱 Govt. to Launch National Assessment on Social Media Impact on Children
The Ministry of Digital Economy, in collaboration with the Ministries of Education and Women & Child Affairs, has announced a national policy review to address the impact of social media on Sri Lankan youth. • Strategic Focus: The initiative aims to balance technological innovation with child safety, moving beyond simple restrictions to evidence-based policy. • Key Risks Identified: The assessment will target cyber bullying, exposure to age-inappropriate content, and the psychological stress impacting sleep, education, and mental health. • Multisectoral Approach: The review will integrate insights from ICT/cyber security, legal, health, and research experts to ensure a safe digital environment. • National Priority: Deputy Minister Eranga Weeraratne emphasized that ensuring online safety is a non-negotiable policy, highlighting the need for a collaborative effort between parents, teachers, and the state.
## 🚭 Sri Lanka Customs Enforces Strict Cigarette Import Ban
• The Directive: Sri Lanka Customs has reiterated a total ban on passengers importing foreign cigarettes. Violators face severe legal penalties as authorities tighten border controls to protect national revenue. • Enforcement Actions: Seizure Volume: 232.804 million foreign-manufactured cigarette sticks were seized over the last four months. Destruction: The entire stock was recently destroyed at the Kerawalapitiya Waste-to-Energy Power Plant under official supervision. • Economic Impact: Valuation: The seized cigarettes were valued at Rs. 305 million. Revenue Protection: The operation prevented an estimated Rs. 271 million loss in tax revenue to the Government. • Key Focus: This move highlights the government's commitment to curbing the illicit tobacco trade, which directly impacts the fiscal health and tax revenue streams essential for the national economy. 📈 ---
Sri Lanka's 2026 Education Reforms: Academic Experts Urge Caution 📈
A group of state university academics has issued a critical review of the NPP Government's "transformational" education reforms scheduled for implementation in 2026, citing significant gaps in transparency, content quality, and institutional readiness. • Overall Fiscal & Strategic Context The government has increased the education budget to 2% of GDP (up from 1.8% in 2023). While infrastructure and teacher recruitment are prioritized, experts argue this remains below the required investment for systemic change. Key reforms include a shift to a module-based system and the extension of school periods to 50 minutes to facilitate activity-based learning. • Critical Sectoral Concerns • Curriculum Gaps: Despite goals for "critical thinking," the new curriculum reduces hours for humanities, history, and civics. Junior secondary level allocates only 10–20 hours per term for these subjects. • STEM & Literacy: Increasing "essential subjects" to 15 has limited the time available for mathematics and mother tongue languages to just 30 hours per term. • Vocational & ICT: While vocational training and ICT/BPM digital literacy are emphasized, the lack of basic infrastructure in rural schools risks widening the digital divide. • Institutional & Material Issues • National Institute of Education (NIE): Academics describe the NIE as "ill-equipped and under-staffed," noting that Grade 6 modules contain typographical errors and "undeclared AI-generated content." • Career Guidance: The proposed Grade 9 "career interest test" is flagged as premature for 14-year-olds given the current underdeveloped vocational pathways. The implementation for Grade 6 has been postponed to 2027 following these concerns. Experts recommend a holistic review and a nationwide consultative process before proceeding. 📊
📈 Sri Lanka Rises in Ease of Doing Business & Tourism Perception
Sri Lanka's performance in the 2026 Global Soft Power Index by Brand Finance reflects a dual narrative of rising economic accessibility and cultural appeal, despite a slight dip in overall global ranking. • Overall Standing & Business Environment • Global Rank: 100th (down from 97th in 2025) with a score of 33.8/100. • Ease of Doing Business: Ranked 79th globally, a significant signal of growing investor confidence in the regulatory environment. • Economic Stability: Perceptions of stability improved, supported by easing inflation and lower borrowing costs. • Tourism & Culture • Visit Appeal: Climbed 8 spots as a ‘great place to visit’. • Culinary: Rose 10 ranks for ‘food the world loves’. • Friendliness: Surged 13 places, highlighting the strength of the hospitality sector. • Sector Performance & Challenges • People & Values: Rose 7 places, reflecting improved public sentiment. • ICT & Media: A notable decline in influential media ranking (from 104th to 129th), indicating reduced global media presence. • Governance: Perceptions deteriorated, showing a gap between macroeconomic stability and the pace of institutional reform.
📈 Sri Lanka Eyes Stronger Regulations on Non-Sugar Sweeteners
A recent assessment by the Institute of Policy Studies (IPS) highlights a critical gap in Sri Lanka's health policies as manufacturers shift from sugar to non-sugar sweeteners (NSS) to bypass current regulations. • Current Policy Gaps The existing Traffic Light Labelling (TLL) and SSB excise tax focus solely on sugar content. This has led to a surge in NSS use, with 70% of green-labeled and 50% of amber-labeled beverages now containing artificial sweeteners, potentially misleading consumers. • Health Implications While used to meet "low sugar" thresholds, the WHO warns that long-term NSS consumption is linked to increased risks of Type 2 diabetes, cardiovascular diseases, and obesity. NCDs currently account for nearly 75% of all deaths in Sri Lanka. • Global Benchmarks & Recommendations Taxation: Countries like India and the Philippines tax both sugar and artificial sweeteners. Labelling: Mexico and Argentina use "Warning Labels" for NSS to prevent consumer misperception. School Policy: Prohibiting the sale and marketing of NSS-containing products within school premises to protect younger demographics. • Strategic Outlook The IPS advocates for a "Nutrient Profile" model to close loopholes. Key recommendations include expanding the SSB tax to cover NSS and updating Front-of-Pack Labelling (FOPL) to include prominent warnings, encouraging the beverage sector to move toward genuinely healthier formulations.
## 🏛️ State Sector Expansion: Internal Affairs Units for Transparency
• Context: Secretary to the President, Dr. Nandika Sanath Kumanayake, chaired a high-level workshop at the Sri Lanka Foundation Institute to streamline the establishment of Internal Affairs Units across the public service. • Scale: Heads of 250 state institutions were briefed on the implementation process, marking a significant step toward structural oversight within government bodies. • Objective: The initiative is a core component of the Government’s broader economic and administrative strategy to ensure a clean, transparent, and accountable public sector. • Impact: By institutionalizing internal monitoring, the move aims to reduce inefficiencies and corruption, fostering a more reliable environment for governance and state-led economic activity. • Status: Based on official reports from the session held on January 29, 2026. ---
Court Urges AG to Expedite Namal Rajapaksa Money Laundering Case ⚖️
• Overall Investigation: The Colombo Chief Magistrate’s Court has issued a formal reminder to the Attorney General (AG) to fast-track legal advice regarding the long-standing money laundering case involving MP Namal Rajapaksa and four others. • Case Details: The investigation, initially led by the Financial Crimes Investigation Division (FCID), centers on the alleged laundering of: • Rs. 15 million through NR Consultation Ltd • Rs. 30 million through Gowers Corporation Ltd • These transactions reportedly date back to 2012. • Current Status: The Criminal Investigation Department (CID) informed the court that the AG’s instructions on future legal actions are still pending. Consequently, Colombo Chief Magistrate Asanga S. Bodaragama has scheduled the next inquiry for 30 July 2026. • Suspects Involved: Alongside Namal Rajapaksa, the CID has named Sudarshana Bandara Ganewatta, Nithya Senani, Sujani Bogollagama, and Indika Prabhath Karunajeewa as suspects in the matter. • Note: This summary is based on current court proceedings and provisional reports from the CID.
📈 Sri Lanka Launches 5-Year National Action Plan (2026-2030) to Combat Human Trafficking
The National Anti-Human Trafficking Task Force (NAHTTF) has officially unveiled a strategic framework to eliminate exploitation and strengthen national responses through 2030. • Strategic Pillars: The plan is built on four core areas: Prevention (community awareness), Protection (victim-centered assistance), Prosecution (investigation and law enforcement), and Partnerships (inter-agency and international coordination). • Key Focus Areas: • Addressing emerging threats like cyber-enabled trafficking and the misuse of AI for recruitment. • Ensuring gender-sensitive, holistic care for survivors, including medical, legal, and economic empowerment. • Strengthening collaboration across 23 government entities, the IOM, and Civil Society Organisations. • National Context: The initiative, led by the Ministry of Defence, aims to safeguard the labour force—particularly women and girls—by preventing re-trafficking and ensuring perpetrators are held accountable. • Implementation: Developed with technical support from the International Organisation for Migration (IOM), the plan aligns with global standards while addressing localized realities. Note: Based on official government launch data (Jan 2026). ---
Cabinet Approves Extension of Driving Licence Validity 🚗
The Cabinet has sanctioned the submission of regulations to Parliament to formalize a temporary extension for driving licences, addressing public disruptions from late 2025. • Overall Measure: Validity of driving licences expiring between 25 November 2025 and 24 December 2025 has been extended by one month via Gazette Notification No. 2467/52. • Primary Drivers: • Weather Impact: Severe adverse weather in November 2025 caused widespread damage and disrupted normal life. • Technical Failures: Computer system malfunctions at the Department of Motor Traffic further stalled the renewal process. • Context: This move ensures road safety compliance and prevents public penalties due to unforeseen circumstances. The proposal was presented by the Minister of Transport, Highways and Urban Development to align with the Motor Traffic Act.
📈 Sri Lanka’s PDPA Enforcement: Transitioning to Mandatory Compliance
Sri Lanka marks a milestone as the first South Asian nation to enforce comprehensive data legislation under the Personal Data Protection Act (PDPA). With the Data Protection Authority (DPA) established and enforcement phased through 2025, compliance is now a legal mandate for all sectors. • Legal & Financial Risks: Non-compliance carries significant penalties, including local fines of up to Rs. 10 Million, potential international legal exposure, and severe reputational damage. • Sector Impact: The act fundamentally changes data handling in finance, healthcare, retail, and ICT/BPM. It moves beyond IT/Legal departments, requiring accountability from any staff handling personal data, including HR and sales. • Operational Standards: • Transitioning from legacy systems to structured data governance. • Emphasis on "Privacy by Design" and alignment with global benchmarks like ISO 27701. • Integration of policies across the entire data lifecycle to ensure operational resilience. • Industry Support: KBSL Information Technologies is leading enterprise transitions, recently achieving ISO 27701 certification to guide firms through audit gaps and system integration. • Key Event: A national PDPA strategy session is scheduled for 12 February 2026 at Cinnamon Grand, featuring experts like Dr. Aparrajitha Ariyadasa to assist businesses in turning compliance into a competitive advantage.
### Parliamentary Probe Into Port Security Lapses Commences 🚢
• Weekly Hearings Initiated: The Parliamentary Select Committee investigating the unauthorized release of 323 containers from the Port of Colombo has officially commenced weekly proceedings as of 28 January 2026. • Timeline & Mandate: The committee, chaired by Justice Minister Harshana Nanayakkara, aims to conclude its inquiry within a three-month window. Meetings are scheduled for every Wednesday to expedite the submission of recommendations to Parliament. • Core Objectives: Investigate Lapses: Examine how 323 containers bypassed mandatory physical inspections, a critical protocol for national security and revenue protection. Evidence Gathering: Summon relevant parties and officials to identify systemic failures in logistics and customs oversight. Policy Recommendations: Formulate strict proposals to prevent future security breaches within Sri Lanka's primary maritime hub. • Context: This probe addresses significant concerns regarding transparency and safety in the shipping and logistics sector, aiming to restore integrity to port operations.
Govt. Redirects Korean Funding: Medical Project Cancelled for Matara Hospital 🏥
The Cabinet of Ministers has officially approved the cancellation of the Medical Equipment Division Development Loan Project, a concessional financing initiative originally backed by the Korean Export-Import Bank’s Economic Development Cooperation Fund. • Project Cancellation: Originally approved in April 2019 to enhance nationwide diagnostic and treatment capacity, the project faced "practical implementation constraints." • Strategic Shift: Following bilateral discussions in June 2025, the government and the Korean lender agreed to pivot toward high-priority national health needs. • New Focus: The diverted focus will now target the re-establishment of the Matara General Hospital at Kaburugamuwa. • Feasibility Phase: Funding will be secured for a comprehensive feasibility study, integrating the hospital project into the broader Matara Urban Development Plan. This shift underscores a move from broad healthcare infrastructure procurement toward localized, high-impact urban health development in the Southern Province.
## 📈 Strengthening Transport Accountability: Chain of Responsibility (CoR)
A legal paradigm shift is proposed to transform road safety in Sri Lanka by adopting the Chain of Responsibility (CoR) framework. This move shifts accountability from individual drivers to all parties in the transport supply chain, addressing systemic failures in heavy vehicle safety. • The Current Gap in Sri Lanka Current protocols focus primarily on the driver and vehicle roadworthiness post-accident. While the Motor Traffic Act and the Penal Code provide for legal action, investigations often miss the broader influences like unrealistic scheduling or poor loading practices. Fatalities rose to 2,710 in 2025, a 13.1% YoY increase from 2024. • The CoR Model (Australian Best Practice) Under the Heavy Vehicle National Law (HVNL), accountability is shared across: Transport Operators: Policies and maintenance systems. Schedulers: Ensuring deadlines do not force speeding or fatigue. Loaders/Consignors: Ensuring timber or heavy cargo is properly restrained. Executive Officers: Personal liability for failing to exercise "due diligence." • Proposed Impact for Sri Lanka Shared Liability: Extends to logistics providers, consignors, and public sector heads. Risk Management: Compels organizations to identify and eliminate hazards before incidents occur. Governance: Integrates safety into the ICT/BPM and plantation sectors’ logistics, protecting human capital. • Legal Consequences Failure to manage risks is an offence even without an accident. Potential penalties for non-compliance include fines up to US$ 3 million for businesses and US$ 300,000 for individuals (based on Australian benchmarks). _Note: Summary based on Part I of a strategic series on public sector accountability (Jan 2026)._
CIABOC 2025 Progress Report: 154 Arrests and Rs. 2.8M Recovered ⚖️
The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) has released its 2025 review, highlighting intensified enforcement across public administration and law enforcement sectors. • Enforcement & Arrests: A total of 154 suspects were arrested in 2025. This includes 84 arrests from 130 raids (68 successful) and 70 additional arrests via separate investigations. • Legal Action: CIABOC filed 115 cases involving 153 accused persons. • 75 cases for bribery. • 21 cases for corruption. • 14 cases for unexplained wealth. • 5 cases for money laundering. • Sector Breakdown: The highest frequency of arrests and prosecutions occurred within the Sri Lanka Police, followed by Divisional Secretariats and Pradeshiya Sabhas. Activity was also noted in transport, revenue institutions, and State-owned enterprises (SOEs). The education sector saw limited involvement, with 3 arrests/prosecutions of school principals. • Financial Outcomes: Total monetary recoveries reached Rs. 2.839 million, comprising: • Rs. 1.6 million in fines. • Rs. 1.056 million in penalties. • Confiscated funds and compensation totaling approx. Rs. 183,000. • Judicial Status: 36 cases resulted in the conviction of 42 persons. As of year-end 2025, 305 cases remain pending, primarily within the High Courts (288 cases). _Data based on CIABOC 2025 Progress Review._
## Mahaweli Authority Farms to be Leased to Farmers and Agri-Entrepreneurs 📈
The Cabinet of Ministers has approved a strategic shift in managing Mahaweli Authority farms, prioritizing local farming communities and young entrepreneurs over private-sector investors to boost productivity and rural livelihoods. • Strategic Shift: Moving away from the 2022 private-investor model, the government will now lease 17 state-owned farms to local farmers while retaining full state ownership of the land. • Sector Focus: Seed Paddy & Crops: Irrigated lands will be leased on a seasonal basis via auctions for seed paddy production and supplementary food crops to ensure national food security. Livestock: Underperforming animal production units (unprofitable for 3+ years) will be leased to entrepreneurs for a maximum of 3 years under a regulated system. Land Utilization: Underdeveloped highland areas and low-yielding permanent crop lands will be subdivided and leased based on yield potential and income assessments. • Economic Objectives: Convert state farms into economically viable units. Meet national seed paddy requirements and improve overall agricultural productivity. Attract youth into the agri-entrepreneurship sector and raise living standards within Mahaweli zones.
Cabinet Clears New Revenue and Levy Regulations 📈
The Cabinet of Ministers has approved a series of gazetted orders and regulations under the Revenue Protection Act and Special Commodity Levy Act for Parliamentary ratification. The measures aim to balance domestic agricultural protection with relief for disaster recovery and religious observances. • Agricultural Levies & Food Security Potatoes and Bombay onions: Special commodity levies maintained to support local farmers and stabilize prices. Hybrid Mandarins: Revenue Protection Order No. 05/2025 sets the levy at 20% of Customs duty or Rs. 60/kg. Mandarin Imports: Repeal of the previous special commodity levy on hybrid category imports approved. • Tax Relief & Extensions Commodity Taxes: Existing tax rates on 62 essential commodities extended until 31 December 2026. Ramzan Season: Tax relief granted for dates imported as donations or grants for the upcoming festive period. • Disaster Recovery Support Cyclone Ditwah: All donations received under projects supporting those affected by the cyclone are now exempt from the special commodity levy to expedite relief efforts. • Sector Impact The regulations primarily impact the food & beverage and retail sectors, ensuring a stable supply of essentials while protecting agriculture—a key driver for rural employment.
Chief Prelates Urge Appointment of Auditor General from Within Department ⚖️
• Key Demand: The Chief Prelates of the Malwatta, Asgiriya, Amarapura, and Ramanna Chapters have formally requested President Anura Kumara Dissanayake to appoint the next Auditor General from within the existing department, specifically naming senior official Dharmapala Gammanpila as a suitable candidate. • Current Vacancy: The post has been vacant since the retirement of W.P.C. Wickramaratne in April 2025. While Gammanpila served in an acting capacity until December 2025, the position remains unfilled following the Constitutional Council's reported rejection of several presidential nominees. • Economic Governance Impact: The Prelates emphasized that the Auditor General is vital for public finance oversight, transparency, and accountability. They cautioned that further delays in filling this constitutional office could harm public perception of the government's economic management and state resource accountability. • Institutional Integrity: The leadership argued against external appointments, citing the specialized technical and institutional demands of the department, which requires long-standing internal experience to effectively safeguard state resources. _Note: Based on official correspondence reported on January 28, 2026._
Travel Ban Issued for X-Press Pearl Local Agent Directors 🚢
• Legal Action: The Attorney General has secured court orders from the Colombo Magistrate’s and High Courts preventing the directors of the MV X-Press Pearl’s local agent from leaving Sri Lanka. • Incident Context: The Singapore-flagged vessel caught fire in May 2021, spilling 25 tons of nitric acid and massive quantities of plastic nurdles, causing severe environmental damage along the western coastline. • Financial & Insurance Impact: A US$ 1 Bn ruling by Sri Lankan courts has sparked global alarm. The London P&I Club warns this judgment could lead to: - Higher marine insurance premiums for vessels calling at Sri Lankan ports. - Increased reliance on uninsured "shadow fleets" globally. - Unlimited liability risks, as Sri Lanka is not a signatory to international liability-capping conventions. • Industry Risk: Global insurers highlighted that current international conventions do not cover plastic pellet spills, leaving a gap in maritime risk management and potential employment/economic stability within the shipping and logistics sector.
### 🩺 CID Investigation Sought Over Unlicensed Cancer Drug
Samagi Jana Balawegaya (SJB) MP Mujibur Rahman has formally requested the Criminal Investigation Department (CID) to probe the importation and administration of an allegedly unlicensed drug used for cancer treatment. • Key Allegations: The complaint follows reports that a specific drug, administered to a known cancer patient, was found to be ineffective by medical professionals. • Regulatory Failure: Inquiries with the National Medicines Regulatory Authority (NMRA) confirmed that the drug in question was not registered for use in Sri Lanka. • Scope of Probe: The MP called for a comprehensive investigation into: • The procurement and importation process. • The circumstances under which the drug was administered. • Regulatory oversight failures regarding pharmaceutical imports. This development highlights critical concerns regarding the healthcare supply chain and the safety of specialized medicine in the local market.
### Landmark India-EU Trade Pact Unveiled 📈
India and the European Union have successfully concluded negotiations for a historic free trade agreement (FTA), dubbed the "mother of all trade deals." Formally announced today, the pact aims to counter rising global protectionism and serves as a strategic stabilizer against volatile trade tariffs. • Overall Trade Performance (2024-25): The EU remains India’s largest goods trading partner with total bilateral trade reaching US$ 136.53 Bn. Exports from India: US$ 75.85 Bn. Imports to India: US$ 60.68 Bn. Services Trade: Valued at US$ 83.10 Bn (2024). • Sectoral Impact & Tariff Changes: The deal is expected to eliminate or significantly reduce duties on over 90% of traded goods, particularly aiding labor-intensive sectors. Apparel & Textiles: Indian exports currently face 10-12% duties; the FTA will likely provide duty-free access, increasing competition for regional peers like Sri Lanka and Bangladesh. Automobiles: India is set to slash high import duties (currently up to 110%) down to 40% for EU vehicles. Key Growth Areas: Gems & jewellery, leather, electrical machinery, and pharmaceuticals are poised for rapid expansion. • Strategic Context: The agreement provides a vital alternative to US and China trade dependencies. For India, it restores competitiveness lost after the EU began phasing out GSP benefits. For the EU, it secures access to a US$ 4.2 Tn economy while diversifying supply chains. _Note: The deal is currently undergoing legal scrubbing; formal signing is expected later in 2026._
Trump Hikes South Korean Tariffs to 25% Amid Trade Friction 📈
President Donald Trump has announced a sharp increase in tariffs on South Korean imports, raising rates from 15% to 25%. The move follows frustrations over the South Korean Legislature’s delay in enacting a "Historic Trade Agreement" reached last year. • Overall Impact & Markets The South Korean KOSPI index fell 0.7%, while the won weakened 0.5% against the dollar following the news. This escalation adds to global trade volatility as Trump continues to use tariffs as leverage across his second term. • Sector Breakdowns Autos: Expected to be hit hardest; auto exports to the U.S. were US$ 30.2 Bn in 2025 (25% of total U.S.-bound shipments). Lumber & Pharma: Also specifically targeted for the 25% rate hike. Corporate Fallout: Shares in Hyundai and Kia dropped 3.5% and 4.8% respectively. • Key Figures (2025 Data) Total South Korean Exports: US$ 709.4 Bn (+3.8% YoY). U.S. Market Share: US$ 122.9 Bn (Second largest market after China), though shipments fell 3.8% YoY. • Strategic Context Seoul had previously agreed to a US$ 350 Bn investment package in U.S. strategic sectors. However, implementation has stalled due to currency instability and legislative delays, triggering Trump's "impatience." _Note: This summary is based on provisional market reports and social media statements from the U.S. Presidency._
Court Sets March Date for Easter Sunday Negligence Case ⚖️
• Legal Proceedings: The Colombo High Court has scheduled the case against former Defence Secretary Hemasiri Fernando and former Inspector General of Police (IGP) Pujith Jayasundara for 23rd March 2026. • The Accusations: Both former officials are charged with criminal negligence for failing to prevent the 2019 Easter Sunday terrorist attacks, which resulted in over 260 fatalities. • Key Context: The Attorney General’s case alleges that despite receiving prior intelligence warnings, senior leadership failed to act. Both defendants were present in court during the latest proceedings as investigations continue into security lapses. • Status: The case remains ongoing as the judiciary examines official accountability regarding national security protocols.
📈 Customs Reform Focuses on Incentives to Curb Corruption
Finance Deputy Minister Dr. Anil Jayantha Fernando has emphasized that fixing the "coercive ranks" and unfair pay structures within Sri Lanka Customs is critical to eliminating bribery and sustaining long-term reforms. • Historical Revenue Performance (2025) • Total Collection: Rs. 2,257 Bn (Surpassing the Rs. 2,231 Bn target). • Growth: Highest-ever collection in history; general cargo revenue rose by 18%. • Enforcement: Rs. 32 Bn contributed via direct enforcement (up 10% YoY). • 2026 Targets & Strategic Outlook • Revenue Target: Set at Rs. 2,207 Bn. • Digitalization: Focus on full automation to reduce face-to-face interactions and manual procedures. • Trade Facilitation: Launch of "Track My CusDec" and expanded "Advance Rulings" for MSMEs. • Governance: A new IMF-backed Code of Ethics and Conduct becomes binding this week to address "substantial" corruption risks. • Efficiency Gains (Time Release Study 2025) • Seaport Imports: Median clearance time improved to 51 hrs 32 mins (down from 54 hrs 19 mins). • Air Cargo: Faster routine clearance noted, though delays persist in pre-customs declaration submissions. • Future Infrastructure: Plans for a Kerawalapitiya cargo yard by 2027 to slash physical exams from 40% to 10%.
Microfinance Bill Sparks Outcry Over "Predatory" Regulation 📈
Community credit providers and rural leaders have raised strong opposition to the proposed Microfinance and Credit Regulatory Authority Bill, warning it threatens grassroots financial resilience. • Core Grievance: Practitioners from over 50 community organizations argue the Bill incorrectly groups informal community credit models—built on solidarity and mutual aid—with commercial microfinance and moneylending. • Impact on Women: Representatives from Yuhashakthi and Mahashakthi (North/East) highlighted that their networks support 10,000+ women. Unlike market-based microfinance, these groups use collective audits and lack a history of aggressive legal or police-led debt recovery. • Key Risks Identified: • Predatory Practices: Critics argue the Bill lacks legally binding safeguards against high interest rates and violent recovery methods. • Over-regulation: Heavy regulatory burdens may dismantle community wealth-building systems, especially in the plantation (Malaiyaha) and rural farming sectors. • Institutional Bias: The Bill is seen as an "external" reform pushed by the ADB and Treasury, favoring commercialization over homegrown developmental solutions. • Strategic Demand: Organizers are calling for a "homegrown" regulatory framework that recognizes the unique role of community-based financial institutions in supporting the household economy and national food production.
📈 District Court Upholds BOI Rights; Dismisses NFC Claim Against Film Lanka
The Colombo District Court has dismissed a long-standing legal action filed by the National Film Corporation (NFC) against Film Lanka Ltd, ruling that BOI-approved companies are exempt from specific industry levies. • Overall Ruling: Additional District Judge Geethani Wijesinghe rejected the NFC’s claim for Rs. 12.30 Mn plus interest (accruing since 2010). The court held there is no legal liability for the defendant to pay the demanded levies. • The Dispute: The NFC instituted the case in 2012, alleging that Film Lanka Ltd—operator of the Cine City cinema complex—owed levies under the National Film Corporation Act from 2002 onwards. • Legal Precedent: The defendant successfully argued that as a Board of Investment (BOI) approved company, it is statutorily and contractually exempt from such levies. The court affirmed that: • Under Section 17 of the BOI Law, the BOI can grant exemptions from certain laws to attract investment. • These agreements are binding on other state bodies, including the NFC. • Economic Context: The defense emphasized that challenging BOI agreements through "unnecessary litigation" by state bodies repulses both foreign and local investment, undermining the national economy. • Outcome: The court found the NFC failed to prove its accounts or provide a proper accounting basis for the claim, concluding a 13-year legal battle in favor of the private sector enterprise.
📈 Digital Law Reform: "Click First, Sue Later" Era Must End
The Jaffna International Law Conference 2026 highlighted a critical "structural misalignment" in Sri Lanka's digital economy. While the Electronic Transactions Act No. 19 of 2006 validates digital clicks as contracts, the legal system struggles to provide remedies when transactions fail. • The Accountability Gap Current digital failures fragment across multiple authorities (Central Bank, CAA, Police). Experts argue that "control plus profit must equal responsibility," suggesting that commercial liability should follow the entity deploying the ICT/BPM infrastructure, rather than being exported to the consumer. • Gig Economy & The "Uber" Precedent Drawing from the UK's Uber BV v Aslam ruling, the keynote emphasized that economic reality—who controls pricing and performance—should outweigh formal contractual labels. This is vital for Sri Lanka’s platform economy to ensure worker and consumer protection. • Proposed Minimum Commercial Obligations To bridge the gap between code and law, four key pillars were proposed: Explainability: Large platforms must provide reasoned explanations for automated decisions. Human Review: Access to human intervention for significant economic consequences (e.g., frozen funds). Inward Risk Allocation: Responsibility must be resolved between vendors and processors before going live. Speed of Remedy: Legal redress must match the instant nature of digital payments. • Future Outlook Sri Lanka is advised to adopt a hybrid approach: preserving statutory certainty while empowering courts to treat platforms as active economic participants rather than passive messengers.
New Tax Method to Revive Sri Lanka’s Gem & Jewellery Sector 📈
The National Gem and Jewellery Authority (NGJA) has introduced a revised tax calculation framework for gem imports to reverse the industry decline seen in 2024–2025. The new system replaces value-based taxation with a simplified, weight-based fixed-rate model. • Revised Tax Structure Precious Stones: Reduced to approximately Rs. 57,195 per kg. Semi-Precious Stones: Set at approximately Rs. 3,200 per kg. Previous Regime: Importers formerly faced 18% VAT and 2.5% SSCL on the full declared value, which led to sharp declines in import volumes and raw material shortages. • Industry Impact & Sector Benefits Lapidary & Manufacturing: Improved supply of raw stones for cutting and polishing and jewellery manufacturing, addressing previous underutilisation of facilities. Export Performance: Aims to boost re-export volumes to major markets (USA, Europe, East Asia) and reclaim global market share from competitors like Thailand and Dubai. Employment: Expected to stabilize livelihoods for thousands of skilled workers in processing and retail, particularly in rural and semi-urban regions. • Economic Context Forex Earnings: The move is strategic for strengthening the balance of payments and stabilizing the exchange rate through high-value gem and jewellery exports. Strategic Recommendation: Authorities are also considering the reintroduction of Income Tax exemptions on gem exports to further enhance Sri Lanka’s competitiveness as a global trading hub. _Note: This summary is based on recent announcements by the NGJA._
📈 Sri Lanka’s Hidden Crisis: The Urgent Need for System Change
Sri Lanka faces a "system crisis" where outdated administrative and procurement frameworks are draining national wealth. Managing a post-crisis economy with pre-crisis logic has resulted in massive hidden losses and stalled recovery. • Overall Impact & Losses • Rigid systems cause projects to take 5 years instead of 2, destroying national wealth. • High human cost: Young professionals migrating and entrepreneurs abandoning businesses due to systemic paralysis. • Declining public services and growing citizen dissatisfaction despite government effort. • Sectoral & Institutional Breakdown • Public Sector: Current rules assume a stability (stable currency, low inflation) that no longer exists. • Banking: Inflexible systems contribute to a rise in non-performing loans (NPLs) as suppliers face cash flow stress. • Governance: Shift needed toward "Adaptive Regulation" and "Entrepreneurial Public Administration" rather than more paperwork. • Strategic Reform Mandate • The Government holds a historic two-thirds majority, providing a rare window for deep institutional re-engineering. • Focus areas: Modernizing procurement, digitalization of human resources, and state-owned enterprise (SOE) governance. • Goal: Transforming from simple "crisis management" to a global reference point for institutional reinvention.
📈 Post-Ditwah Reconstruction: Urgent Procurement Reforms Needed
Cyclone Ditwah has caused an estimated US$ 4.1 Bn in direct physical damage, equivalent to ~4% of Sri Lanka’s GDP. To avoid costly delays, industry experts urge immediate activation of existing emergency procurement frameworks to fast-track rebuilding. • Overall Impact (World Bank Data): • Total Direct Damage: US$ 4.1 Bn (provisional). • Infrastructure & Buildings: US$ 3.28 Bn (including roads, bridges, and housing). • Agriculture: ~US$ 814 Mn in damage to crops, livestock, and rural assets. • Proposed Reforms & Sectoral Impact: • Construction: The National Construction Association of Sri Lanka (NCASL) proposes emergency contracts capped at Rs. 600 Mn using standardized pricing (HSR + 25%) to bypass tender delays. • ICT/BPM & Services: Faster restoration of connectivity and public facilities is critical to minimize disruption to the digital economy. • Labor & Materials: Proposals include temporary access to foreign construction labor and stabilizing supply chains for aggregates and quarries. • Key Strategies for Speed: • Transition to Design-and-Build models for large-scale projects. • Shift from sequential approvals to parallel processing by the National Procurement Commission. • Financial relief for contractors via proportionate risk management instead of rigid collateral. • Financial Context: The Government has allocated a Rs. 500 Bn (approx. US$ 1.62 Bn) supplementary budget for 2026 to support the "Rebuilding Sri Lanka" initiative.
📈 Court Dismisses People’s Bank Appeal on RTI Transparency
The Court of Appeal has upheld a directive by the Right to Information Commission (RTIC), ordering People’s Bank to release internal audit and inquiry reports to a customer. The ruling reinforces the constitutional right to information over internal bank secrecy. • The Ruling: A two-judge bench dismissed the bank's appeal against a 2022 RTIC decision. The Court ruled that requested documents regarding a partnership’s accounts (2007–2019) did not fall under legal exemptions. • Key Legal Precedents: • Third-Party Privacy: The Court rejected the bank's "third-party" privacy claim, noting the requester was the managing partner of the entity in question—thus not a third party. • Section 6 (Severability): The judgment emphasized that even if sensitive data exists, banks must redact (sever) specific details rather than withholding entire reports. • Fiduciary Duty: Arguments citing breach of fiduciary duties were dismissed as the disclosure related to an inquiry into the requester's own complaint. • Impact on Banking: This sets a significant transparency benchmark for state-owned banks, confirming they are "public authorities" accountable under the RTI Act. It limits the use of "confidentiality" as a blanket shield against disclosing information related to the use of public resources or internal inquiries.
Headline: 📉 OECD Pillar Two: The End of Traditional Tax Holidays?
The global tax landscape is shifting as the OECD's Pillar Two framework mandates a 15% global minimum corporate tax rate. For Sri Lanka, this signals a major change in how the country attracts foreign investment. • The 15% Rule Multinational enterprises (MNEs) with global revenues over €750 million must pay an effective tax rate of at least 15%. If a country offers a lower rate (e.g., 5%), the MNE’s home country can "tax back" the 10% difference, rendering local tax holidays ineffective for the investor. • Sri Lanka’s Strategic Options To prevent losing tax revenue to foreign jurisdictions, Sri Lanka is considering two paths: Domestic Minimum Top-Up Tax (DMTT): Implementing a local 15% minimum tax so the revenue stays within the country. Expenditure-based Incentives: Shifting away from profit-based holidays toward credits for ICT/BPM, apparel & textiles, and R&D—areas that reward actual economic activity and employment. • Sector Impact & Policy Shift Apparel & Textiles: Long a beneficiary of tax exemptions, this sector may need to pivot toward investment-linked credits. ICT/BPM: As of April 2025, service exports are already taxed at 15% if remitted via banks, aligning with global standards. SMEs: To support local growth, the 2026 Budget proposed lowering the investment threshold for incentives from US$ 3 Mn to US$ 250,000.
Judiciary Independence & Separation of Powers: Constitutional Debate ⚖️
• Context: A legal critique challenges Prof. G.L. Peiris’s view that the Judiciary should show deference to the Executive during states of emergency. The debate stems from the Supreme Court's ruling that the 2022 emergency declaration by the Acting President violated Fundamental Rights. • Key Legal Principles: Separation of Powers (SOP): Unlike the 1972 Constitution, the 1978 2nd Republican Constitution explicitly reintroduced the SOP, delineating Executive, Legislative, and Judicial powers. Judicial Review: The Supreme Court holds exclusive jurisdiction under Articles 125 and 126 to interpret the Constitution and protect Fundamental Rights. Executive Accountability: There are no constitutional restraints preventing the Judiciary from reviewing Executive actions, including emergency declarations. • Recent Developments: The Speaker of Parliament recently (Jan 9, 2026) refused a motion to oversee judicial appointments, affirming that Parliament is not hierarchically superior to the Judiciary. The legal consensus emphasizes that the independence of the judiciary is a foundational feature, ensuring "power is a trust" and preventing unfettered Executive discretion. • National Impact: Maintaining a strong SOP is vital for the Rule of Law, which underpins investor confidence and economic stability in Sri Lanka's legal and business environment.
📈 Apparel Exporters Welcome Efficient VAT Refund Shift
• Summary: The apparel sector reports a positive transition following the abolition of the Simplified VAT (SVAT) scheme on 1 October 2025. The new Risk-Based Refund Scheme (RBRS) has seen most qualified exporters receive refunds for October and November 2025 ahead of the expected 45-day window. • Key Developments: • Successful pilot of an API linked to the RAMIS system, enabling automated data matching and reduced manual intervention. • Strong collaboration between the IRD, Presidential Task Force, and the apparel & textiles industry. • Significant progress in digitizing the refund process to support predictable cash flows amidst high working capital costs. • Sector Focus: • Apparel: As the country’s largest export earner, timely refunds are critical for maintaining global competitiveness and financial stability. • SMEs: Efforts are ongoing to extend these faster refund benefits to small-scale and indirect exporters. • Industry Proposals: • Fast-tracking a sector-wide e-invoicing framework to ensure seamless value chain verification. • Shifting away from manual invoice-level checks (currently applied to refunds over Rs. 50 Mn) toward a strictly risk-based, low-intervention audit mechanism.
## 📈 Sri Lanka Health Reform: Shift Toward Modern Legislation and Patient-Centered Care
Sri Lanka’s healthcare system, modeled after the UK’s NHS, requires urgent legislative modernization to move beyond its 1956/1987 framework. With healthcare investment reaching approximately 6.7% of GDP in 2025, the focus is shifting from "mega spending" to legal protection and structural reforms. ### • Legislative & Governance Priorities Medical Reform: Transitioning from infrastructure-heavy investments to ethical, equitable, and legally protected care. Legal Framework: Proposing a new Health Ministry Act to embed modern values and accountability, replacing outdated laws. Mental Capacity Act: Introducing formal criteria to assess decision-making capacity (Understand, Retain, Weigh, Communicate). ### • Clinical Standards & Safety Shared Decision-Making: Moving from clinician-led decisions to an obligation of informed consent—"No decision about me without me." Blame-Free Reporting: Implementing a legally mandated, non-punitive system for medical errors (similar to the Datix system) to reduce the 5% global error rate. Medication Governance: Adopting a national formulary for clinical and cost-effectiveness, mirroring the UK's NICE standards. ### • Sector Impacts & Outlook Public Health: Emphasis on Preventive Care (Primary, Secondary, and Tertiary) to reduce long-term costs. Economic Potential: Aligning with international standards to attract medical students and trainees, potentially generating national income. Human Rights: Embedding the FREDA principles (Fairness, Respect, Equality, Dignity, Autonomy) into clinical practice. _Note: Summary based on provisional policy recommendations and 2025 GDP data._
### Coal Procurement Delays Risk Power Tariff Hikes 📈
Sri Lanka's largest coal procurement—1.5 million MT valued at approximately US$ 150 million—is facing significant delays and procedural controversies, threatening national energy security and "cost-reflective" electricity pricing. • Core Figures & Bids The tender for the 2025/26 season was awarded to Trident Chemphar at a CIF price of US$ 98.50/MT. This narrowly beat a US$ 100.00/MT bid from Potencia (SUEK) and a US$ 105.00/MT offer from Aditya Birla. Analysts warn the winning price leaves zero margin for logistical contingencies. • Supply & Quality Concerns Trident has reportedly missed scheduled laycans; only 3 of 6 planned January shipments are on track. Provisional data suggests first shipments failed quality tests at the Norochcholai plant, showing higher ash content (21% vs 16% limit) and lower calorific values (5,600 kcal/kg vs 5,900+ required). Inefficiencies mean ~117 MT of this coal is needed to produce the same power as ~108 MT of high-quality Russian coal. • Economic Impact Financial Loss: Irregularities and quality drops are estimated to cause a Rs. 7.5 Bn (approx. US$ 38 Mn) burden. Process Lapses: Standard 42-day bid preparation times were slashed to 21 days, while qualification criteria (turnover and past performance) were significantly lowered. Tariffs: With coal accounting for ~40% of generation, these added costs and potential spot-market purchases are likely to be passed to consumers via higher electricity bills.
📈 Carson Group Faces US$ 108.4 Mn Fine Amid Indonesia Palm Oil Crackdown
Sri Lankan conglomerates Carson Cumberbatch PLC and Bukit Darah PLC have issued a market update regarding a significant regulatory move by the Indonesian Government impacting their palm oil interests. • Provisional Fine: A subsidiary, Goodhope Asia Holdings Ltd., has been notified of a provisional administrative fine of approx. IDR 1,826 billion (approx. US$ 108.4 million). • Impacted Land: The fine follows new Indonesian laws that have affected roughly 4.1 million hectares of plantations nationwide. For the Group, this specifically involves the reclassification of 12,152 hectares as forest land. • Current Status: The fine is a "temporary notification" subject to finalisation. Goodhope is seeking clarification on the computation methodology and remains in constructive dialogue with the Indonesian Presidential Task Force. • Financial Position: The Group stated it maintains adequate liquidity to manage the financial impact if the fine is formally imposed. The situation is part of a broader nationalization and regulatory enforcement campaign in Indonesia, the world's top palm oil producer, which has repossessed lands from over 580 companies to date. Operational continuity is currently maintained through discussions with the state-owned enterprise PT Agrinas Palma Nusantara.
📈 Flood Management: Shifting Focus from Plains to Catchments
The recent devastation from Cyclone Ditwah has underscored the urgent need for a paradigm shift in Sri Lanka's disaster management. Experts advocate for "at-source" flood control in upper catchments rather than relying solely on downstream defenses. • Economic Impact of Cyclone Ditwah Estimated total damages and replacement costs have reached nearly US$ 7.00 Bn (Rs. 2,100 Bn). This single extreme event has severely strained the national economy, with infrastructure, agriculture, and housing bearing the brunt. • Current Infrastructure Limits Runoff from the Mahaweli, Kalu, and Kelani rivers accounts for 90% of the 39 billion cubic meters of water discharged annually. During peak cycles, Victoria Reservoir released 2,700 m³/s, highlighting that reservoir buffering alone is insufficient when soil "sponges" fail due to poor land use. • Strategic Sectoral Solutions • Plantations & Agriculture: Implementing contour bunds, lock-and-spill drains, and permanent vegetation (e.g., vetiver) can reduce surface runoff by 30-50%. • ICT/BPM & Infrastructure: Sustainable drainage and decentralized "SABO" dams are required to protect critical connectivity networks and urban centers. • Micro-Storage: A network of 1 million household retention ponds could provide 168 million m³ of net storage—equivalent to the Kotmale Reservoir capacity. • Policy & Coordination While the Soil Conservation Act and Disaster Management Act provide adequate legal frameworks, the author notes that weak enforcement and overlapping institutional roles remain the primary barriers to resilient watershed management.
📈 Strategic Roadmap: Positioning Sri Lanka’s Passport as a National Asset
A new analysis highlights the critical link between Sri Lanka’s passport strength and its broader economic credibility, calling for a strategic shift to enhance global mobility and investor confidence. • Global Rankings & Performance Sri Lanka ranks 93rd globally out of 199 passports in the newly released 2026 Henley Passport Index. By comparison, Singapore remains 1st (192 visa-free destinations), while the UAE has surged 57 places since 2006 to reach 184 destinations. Despite challenges, Sri Lanka remains a regional leader in the 2025 Human Development Index (HDI), ranking 89th out of 193 nations. • Economic Resilience & Context The economy is recovering from a series of shocks, including the Easter Sunday attacks, COVID-19, and the recent Cyclone Ditwah, which affected 2 Mn people across all 25 districts. Experts urge a focus on export diversification and governance to rebuild international trust. • Strategic Recommendations Transition to secure biometric e-passport systems to meet international standards. Proactive diplomatic negotiations for reciprocal visa-free or visa-on-arrival arrangements. Aligning visa facilitation with investment agreements and trade partnerships to boost professional mobility and youth aspirations. _Note: Summary based on provisional 2026 index data and expert analysis from the Open University of Sri Lanka._
📈 Enhanced Standards for Sri Lanka's Organic Sector
The Sri Lanka Standards Institution (SLSI) has released the second revision of the national organic standard (SLS 1324:2025). This updated framework aims to strengthen the credibility of organic agriculture and align local production with evolving global trade requirements. • Core Scope: Governs the entire value chain, including crop and livestock production, aquaculture, wild harvesting, processing, and marketing. • Mandatory Management: Introduces the Organic Management Plan (OMP), requiring operators to document systematic procedures for soil fertility, pest management, and traceability to ensure accountability. • Strict Prohibitions: Explicitly bans hydroponics (non-soil based systems), GMOs, ionizing radiation, and nanotechnology to protect organic integrity. • Sustainability & Ethics: Integrates social justice principles, focusing on fair labor practices and worker welfare within the agri-business sector. • Sector Impact: Enhances market access for high-value exports such as tea, spices, and coconut products by aligning with international certification benchmarks. This revision provides a robust regulatory foundation to prevent misleading claims, improve consumer confidence, and support the long-term growth of Sri Lanka’s sustainable agriculture exports.
### Premadasa Rejects Reports of Deadlock Over CC Nominees 📈
Opposition Leader Sajith Premadasa has officially dismissed media reports alleging a standoff between the Government and the Opposition regarding the appointment of civil society representatives to the Constitutional Council (CC). • Clarification on Deadlock: Premadasa categorized the reports as "false and without basis," refuting claims that he and Prime Minister Dr. Harini Amarasuriya failed to reach a consensus on the new appointees. • Nomination Process: Previous reports suggested the PM proposed 7 names while the Opposition Leader submitted 10. Under the Constitution, these appointments require mutual concurrence between both parties. • Outgoing Members: The terms for the current three civil society members—Anula Wijesundere, Prathap Ramanujan, and Dinesha Samararatne—expired last week. • Institutional Role: The Constitutional Council is critical for maintaining independence in high-level appointments, directly impacting sectors like law enforcement, public service, and financial oversight. _Note: This summary is based on provisional media statements and official social media clarifications._
Sri Lanka Accelerates Digital Transformation via Global Partnerships & Reforms 🇱🇰
The Government has intensified its drive to position Sri Lanka as a regional tech hub through strategic international collaborations and public sector digitisation. • Research & Tech Ecosystem: High-level talks with the University of Oulu (Finland) and IIT Madras focus on establishing a local R&D institute. The goal is to anchor Sri Lanka as a regional center for advanced technologies, including 6G communications. • Smart Public Transport: A digital payment system for bus fares via bank cards is launching in the Uva Province. Operators in Badulla have committed to a full rollout within months, marking a transition toward cashless public infrastructure. • Export & Investment: The official launch of Sri Lanka Expo 2026 (scheduled for June) aims to showcase manufacturing, digital innovation, and investment potential to global markets through its new digital platform. • Education Sector: A digitisation project is underway to equip schools with computers and smart boards, supported by a grant from the Chinese Government. • Strategic Oversight: The Ministry of Digital Economy is fast-tracking these initiatives to improve service efficiency and strengthen Sri Lanka’s ICT/BPM and manufacturing footprint globally.
## Haj Operations Reform: Shifting to Open Market 📈
The Sri Lankan government has initiated a significant overhaul of Haj pilgrimage management, moving away from a rigid quota system toward a competitive market model to protect pilgrims from exploitation. • Strategic Transition The Haj Committee, under new professional leadership, has introduced a hybrid quota-allocation system. This marks a departure from previous models plagued by litigation and "money-spinning" unethical practices by operators. • Market-Driven Mechanics Phase 1: Operators are categorized by merit, with caps of 75 or 50 pilgrims per class to encourage competitive pricing. Phase 2 (2027): Plans to remove maximum ceilings entirely, allowing the service and travel market to dictate selection based on quality and cost. • Economic & Regulatory Impact Transparency: A move to eliminate political favoritism and "predatory pricing" that historically drove up costs for the national religious tourism segment. Standardization: Requirement for formal contracts between operators and pilgrims to be lodged with the Committee for legal oversight. Future Outlook: Calls for a comprehensive Haj Regulatory Act to formalize these reforms and align with broader national goals of institutional accountability. • Key Figures Quota Allocation: Historically 1 pilgrim per 1,000 Muslims (OIC standard). Governance: Managed by a newly appointed committee of professionals (KPMG, SLAS, and legal experts).
📈 Victoria’s Secret Cracks Down on Counterfeit Trade in Sri Lanka
Global beauty giant Victoria’s Secret & Co. has successfully concluded criminal enforcement actions against several Sri Lankan retailers for selling counterfeit products. Following coordinated raids, the offenders pleaded guilty to infringing on registered trademarks. • Enforcement Actions & Raids The Colombo Crime Division (CCD) executed simultaneous raids on wholesale and retail hubs in Pettah (Yumnas, Nourish, and Nasreen Beauty Centre) and Dehiwala (The Beauty Store and Savers). Large quantities of fake body mists, perfumes, and lotions were seized. • Legal Outcomes The Colombo and Mount Lavinia Magistrates imposed fines on all accused parties and ordered the immediate destruction of the seized goods. The action was taken under the Intellectual Property Act, No. 36 of 2003. • Consumer Safety Risks The brand emphasized that counterfeit cosmetics and fragrances bypass strict quality controls. These unregulated products often contain unknown ingredients that cause skin irritation, allergic reactions, and respiratory issues. • Economic Impact Intellectual Property (IP) violations result in significant losses in tax revenue for the Government and erode brand reputation. Effective enforcement is seen as vital to maintaining investment incentives in Sri Lanka’s retail and FMCG sectors.
## ICC Sri Lanka Raises Concerns on New VAT Invoicing 📈
The International Chamber of Commerce Sri Lanka (ICCSL) recently convened a seminar to address implementation challenges regarding the new VAT Tax Invoice format, scheduled to take effect from 1 April 2026. • The Structural Shift The reform is viewed as a significant change in how businesses document transactions and claim input tax credits. It aims for greater traceability, alignment with digital compliance, and the prevention of fictitious invoicing. • Practical Implementation Risks Business leaders and tax professionals from KPMG and Ernst & Young identified several critical hurdles: System & Software Readiness: High costs for upgrading IT infrastructure to meet new mandatory fields. SME Burden: A disproportionate compliance weight on small and medium enterprises. Compliance Risks: Potential for invoice rejection and denial of input tax credits due to minor technical errors or "timing mismatches." • Key Recommendations Transition Period: A call for adequate lead time to train staff and adjust systems before strict enforcement. Clarity & Certainty: The IRD is urged to resolve ambiguities and finalize the format before businesses incur significant system development costs. Guidance Over Penalty: A balanced approach prioritizing education and practical guidance notes over immediate punitive measures for genuine errors. The ICCSL will submit formal proposals to the Inland Revenue Department to ensure these reforms support economic stability and the ease of doing business rather than creating unintended friction.
📈 New Speed Cameras: Shift Toward Digital Enforcement
Sri Lanka has introduced advanced, US-made speed cameras to combat a persistent road fatality rate of 11.2 per 10,000 people. While the technology marks a significant public investment, experts emphasize that road safety must supersede revenue generation to be effective. • Overall Impact & Data Between 2020 and 2024, the country recorded 118,697 accidents and 12,322 deaths. Economic losses from road crashes are estimated at US$ 3 Bn annually, roughly 3% of GDP. • Technological Capabilities The new laser-based cameras can detect speeds and capture high-resolution images of license plates from up to 1.2 km away, even at night. These are integrated with the Traffic Violation Management Software launched in early 2025 to automate fine issuance. • Critical Policy Recommendations To ensure the ICT/BPM and digital infrastructure investments succeed, the following shifts are urged: Independent Oversight: Camera locations should be data-driven, not officer-selected. Transparency: Advance signage (500m) and a 10% speed buffer (e.g., enforcing 55 km/h in a 50 km/h zone) to ensure fairness. Digital Processing: Transition to postal/electronic fines to eliminate roadside stops, which reduce corruption risks and secondary accident hazards. • Sector Context Effective enforcement is vital for the tourism and logistics sectors, ensuring safer transport corridors. However, success depends on moving away from manual, selective enforcement toward a tamper-proof, cloud-based system.
## 📈 Sri Lanka Initiatives Recognized at Global Caregiver Forum 2026
Sri Lanka received international acclaim for its integrated post-disaster recovery strategies at the Global Caregiver Forum 2026 in Madrid. Representing the nation, Minister of Women and Child Affairs Saroja Paulraj highlighted the country’s shift toward a "people-centered" economic and social recovery model. ### • Key Initiatives & Recognition "Rebuilding & Healing Sri Lanka": Two parallel programs were praised by global leaders for addressing both physical reconstruction and the psychosocial well-being of caregivers and families. Global Recognition: The forum—patronized by HM Queen Letizia of Spain and supported by UNICEF and the WHO—commended Sri Lanka's efforts in protecting children through caregiver support. ### • Sector Impacts & Strategy Care Economy: With women contributing an estimated 8.6% to 35% of GDP through unpaid care work, the government is prioritizing the formalization of this sector to boost labor force participation. Early Childhood Development: Minister Paulraj outlined national reforms in preschool curricula and teacher training to align with global standards. Migrant Worker Welfare: Addressing the "care deficit" caused by female migration is a priority, as over 41% of foreign employment departures are women, often leaving behind vulnerable family units. ### • Economic Context Investment Dividend: Current data suggests every US$ 1.00 invested in care packages could generate a US$ 7.76 increase in GDP, making caregiving a strategic pillar for national growth. Employment Potential: Estimates indicate Sri Lanka could generate over 800,000 care-related jobs by 2035 through structured investment in childcare and long-term care services. _Note: Summary based on official forum proceedings and provisional ministerial statements._
## National Fisheries and Aquaculture Policy Approved by Cabinet 🌊
The Cabinet of Ministers has officially approved the implementation of the updated National Fisheries and Aquaculture Policy, marking a shift towards formalized sustainable management and equitable benefit distribution within the sector. • Policy Integration: The redrafted policy is now aligned with the government's current economic framework and has been integrated with national development strategies following recommendations from the Department of National Planning. • Strategic Objectives: Focuses on the sustainable management of aquatic resources to ensure long-term viability. Aims for the equitable distribution of industry benefits to support coastal and inland fishing communities. Modernizes previous frameworks to meet evolving global and local industry requirements. • Economic Context: As a vital component of Sri Lanka’s blue economy, the policy seeks to streamline the fisheries and aquaculture sectors to better contribute to national GDP and food security. • Status: Implementation is set to begin immediately as part of the broader national economic strategy.
🚨 Interpol 'Red Notice' Crackdown: 95 Fugitives Targeted
Sri Lanka Police have intensified efforts to repatriate organized crime figures, with 95 Interpol ‘Red Notices’ currently active against suspects hiding overseas. • Repatriation Trends: • 2024: 10 suspects returned via Red Notices. • 2025: 11 suspects returned via Red Notices. • Extradition: 21 suspects brought back under extradition laws during 2024–2025. • Recent Apprehensions: Three suspects (two males, one female) were repatriated yesterday with assistance from the UAE Government, Abu Dhabi Police, and Dubai Police. • Suspect Profiles: • Kandana Suspect: Main suspect in a July 2025 shooting; linked to murders and illegal firearms. • Elpitiya Suspect: Involved in Southern Province underworld crimes and weapon possession. • Mount Lavinia Suspect: Female suspect wanted for misappropriation of state funds dating back to 2014. • National Impact: Enhanced international cooperation aims to curb organized crime and financial fraud, critical for maintaining the rule of law and protecting the national economy from illicit activities. Investigations are ongoing by the CID and regional crime divisions.
⚖️ Constitutional Debate: Speaker Rejects Oversight of JSC
A significant constitutional debate has emerged following Speaker Jagath Wickramaratne’s rejection of a parliamentary motion to examine the Judicial Service Commission (JSC). The motion, supported by 31 MPs, sought a Select Committee to review JSC powers regarding the appointment, promotion, and discipline of judicial officers. • Core Dispute: The Speaker ruled that a parliamentary inquiry would violate the independence of the judiciary, asserting that the JSC exercises the "judicial power of the People." • Constitutional Critique: Critics argue this is a "fundamental flaw," citing a 1962 Supreme Court ruling (The Queen v. Liyanage) which defined the JSC as an executive body, not a judicial one, despite being chaired by the Chief Justice. • Global Standards: Concerns were raised that Sri Lanka has yet to adopt the Bangalore Principles of Judicial Conduct or the Istanbul Declaration, international "gold standards" for judicial transparency and disciplinary procedures. • Legislative Context: The motion followed a heated 2026 Budget debate over financial allocations for the JSC. While judge salaries are protected, the JSC’s administrative conduct remains a point of parliamentary contention. _Summary based on current reports and legal reviews._
🚨 SEC Files CID Complaint Against Unlicensed "Blue Ocean Securities" & BOMate App
The Securities and Exchange Commission of Sri Lanka (SEC) has escalated enforcement actions against Blue Ocean Securities Ltd and its mobile application, BOMate, labeling them as unlicensed investment entities. • Regulatory Action: The SEC and the Colombo Stock Exchange (CSE) have filed formal complaints with the Criminal Investigation Department (CID) to initiate criminal investigations. • Public Alert: Investors are strictly urged not to deposit funds into any bank accounts associated with this entity. The SEC confirmed it has handed over all public complaints and linked bank details to the CID. • Impersonation Warning: Individuals identified as "Rohan Dias" (claiming to be Chief Analyst) and "Natasha Perera" (Assistant) are unauthorized. The SEC warned that these names are being used to mislead the public. • Status: The entity is not licensed to function as a market intermediary in the financial services sector. This follows a preliminary scam warning issued by the regulator on 25 November 2025. Investors are advised to exercise extreme caution and verify the licensing status of any stockbroking or investment firm via the official SEC website. 📈
Industry Bodies Flag Key Gaps in Draft National Electricity Policy ⚡
A coalition of Sri Lanka’s leading chambers and associations, including the Ceylon Chamber of Commerce and JAAF, has submitted joint observations raising concerns over the Draft National Electricity Policy. • Key Concerns: The industry highlights that the policy lacks depth in addressing affordability, decarbonization, and the long-term financial health of the power sector. • Renewable Energy Impact: Current provisions—such as uncompensated curtailment, removal of feed-in tariffs, and mandatory time-of-use tariffs for rooftop solar—threaten the bankability of projects and risk increasing the cost of capital. • Tariff & Subsidies: Proposed revisions to remove cross-subsidies and restrict household subsidies to under 30 kWh per month are flagged for potential fiscal risks and impact on energy access. • Economic Context: For critical sectors like apparel & textiles, tea, and ICT/BPM, the lack of a clear framework for market competition and energy storage could undermine industrial competitiveness. • Industry Recommendation: The group calls for a comprehensive revision aligned with the Electricity Act, incorporating planning for cross-border trading and emerging technologies to ensure long-term investment confidence. 📈
## ⚖️ Legal Action Against Counterfeit Plumbing Products in Sri Lanka
The Colombo Chief Magistrate has commenced an inquiry following a CID investigation into the sale of counterfeit KITZ Corporation Japan products. The case highlights ongoing efforts to protect intellectual property within the local construction and hardware sectors. • Case Overview: Two hardware dealers are accused of selling duplicated plumbing items, misleading consumers by branding them as genuine Japanese KITZ products. • Authorized Representation: Elite Corporation, based in Messenger Street, testified as the sole authorized distributor for KITZ Japan in Sri Lanka. • Evidence: The CID produced seized items in court, which the authorized agent confirmed were fakes, contrasting them against original samples. • Legal Context: The Criminal Investigation Department’s (CID) Financial Fraud Unit is leading the prosecution to curb the circulation of sub-standard building materials that impact infrastructure quality. • Next Steps: The trial is set to continue on March 19, 2026.
⚡ No Electricity Tariff Change for Q1 2026
The Public Utilities Commission of Sri Lanka (PUCSL) has officially ruled out any revisions to electricity tariffs for the first quarter of 2026. This decision ensures price stability for consumers and industrial sectors through March. • CEB Procedural Failure: The decision follows the failure of the Ceylon Electricity Board (CEB) to submit a formal tariff revision proposal within the required regulatory timeframe. • Shortcomings Identified: Beyond the delay, the PUCSL noted significant deficiencies in the CEB's initial proposal. • Impracticality of Adjustments: The Commission determined that imposing a high-percentage tariff adjustment for the remainder of the quarter would be impractical, even if a revised submission were received now. • Economic Impact: Tariffs will remain at current levels, providing a predictable cost environment for manufacturing, apparel, and small businesses during the first three months of the year. Based on official PUCSL statements as of January 15, 2026.
📈 Revenue Agencies Unite to Combat Tax Evasion & Under-Invoicing
Sri Lanka Customs and the Inland Revenue Department (IRD) signed a landmark MoU on January 13, 2026, to launch joint investigations into import under-valuation and related tax leakages. • Strategic Collaboration: The agreement enables joint audits of declarations made by importers, targeting businesses that use third parties to evade tax liabilities. This initiative is coordinated by the Revenue Administration Reform and Modernisation Office. • Performance Milestones (2025): • Sri Lanka Customs: Achieved record revenue of over Rs. 2,415 Bn (surpassing the Rs. 2,115 Bn target by ~Rs. 300 Bn). • Inland Revenue Department: Collected a historic Rs. 2,203 Bn, exceeding its annual target by Rs. 33 Bn. • Addressing Structural Gaps: The move follows IMF Governance Diagnostic warnings regarding fragmented revenue institutions. The joint mechanism aims to reduce "siloed" operations that previously created opportunities for corruption and rent-seeking in customs valuation and tax assessments. • Modernization Goals: While digitization (e.g., ASYCUDA) has improved transparency, the government aims to further phase out manual processes and strengthen data-sharing to secure national fiscal targets.
⚠️ Regulatory Hurdle Threatens $ 12.75 Mn FDI Cable Car Project
Amber Adventures Ltd. has warned the Board of Investment (BOI) that its cable car project at Ambuluwawa is at risk due to "arbitrary" regulatory interference. • Investment Status: Out of a total approved FDI of US$ 12.75 Mn, approximately US$ 3.5 Mn has already been deployed. The investment was notably secured in 2022 during the height of Sri Lanka's economic crisis. • Regulatory Conflict: The Central Environmental Authority (CEA) suspended development on 9 January 2026, citing social media posts and unreported complaints. The company alleges this lacks legal basis, as the project holds approvals from over 12 state agencies, including the UDA, NBRO, and SLTDA. • Project Impact: • Structured as a Public-Private Partnership (PPP) under a Build-Operate-Transfer (BOT) model. • Total asset value exceeding Rs. 5 Bn to be transferred to the State free of charge after 13 years. • No financial risk to the government; all risks borne by the investor. • Technical & Legal Stand: The company denies environmental damage, noting that NBRO confirmed site stability post-Cyclone Ditwah. A 2024 Court of Appeal ruling previously found local obstruction to be "mala fide." • Outlook: Amber Adventures is currently evaluating legal avenues for investment recovery and restitution of damages, warning that such "harassment" undermines national investor protection and regulatory certainty. Based on official company statements.
⚖️ Supreme Court Affirms State Liability in Jacobe Resources Arbitration Case
The Supreme Court of Sri Lanka has dismissed an appeal by the Inspector General of Police (IGP), upholding a 2019 arbitration award and subsequent Commercial High Court judgment in favor of Jacobe Resources International Singapore Ltd. • Case Background: The dispute involved breaches of two contracts by the Sri Lankan State. A majority arbitral tribunal, led by former Chief Justice G.P.S. de Silva, originally ruled in 2019 that the contracts were breached, entitling the company to damages. • Legal Ruling: The Supreme Court (Justices Mahinda Samayawardhena and Sampath Wijeratne) refused the IGP’s petition to set aside the High Court's enforcement of the award, effectively confirming the State’s liability. • Financial Implications: The judgment enforces the payment of: • Damages for contract breaches. • Legal interest calculated from 2014. • Full costs of the arbitration proceedings. • Significance: This ruling reinforces the enforcement of international arbitration awards in Sri Lanka and underscores the accountability of state institutions in commercial contractual obligations.
📈 Road Safety: AA Ceylon Advocates for Mandatory Vehicle Testing
The Automobile Association of Ceylon (AA Ceylon), supported by the FIA and UN, has launched a high-level initiative to address rising fatal accidents caused by technical failures in Sri Lanka. • The Current Gap: Out of over 8 million registered vehicles in Sri Lanka, currently less than 20% (only heavy vehicles) are subject to compulsory roadworthiness tests. • Key Concern: Many accidents linked to technical malfunctions go unreported due to private insurance settlements, masking the true scale of the safety crisis. • The Proposal: AA Ceylon has submitted a formal proposal to President Anura Kumara Dissanayake and relevant ministries for a low-cost, mandatory testing framework for all vehicle classes, aligning Sri Lanka with international safety standards. • Economic & Social Impact: The initiative, partnered with the Lions Club, seeks to reduce the burden on the national healthcare system (Accident Service) and improve overall road safety for all citizens.
📈 Why Sri Lanka’s 2005 Tourism Act Remains Vital for Stability
The local hospitality sector advocates for refining rather than repealing the Tourism Act No. 38 of 2005, emphasizing its role in sustained growth and investor confidence over the last two decades. • Governance Framework: The Act established specialized institutions including the Sri Lanka Tourism Development Authority (SLTDA) and the Sri Lanka Institute of Tourism and Hotel Management (SLITHM). This separation of functions has historically reduced political interference and professionalized regulation. • Financial Trust: Industry cooperation regarding the one percent turnover levy is strictly tied to the Act’s guarantees of industry representation and transparent fund usage. Any repeal risks undermining private-sector trust. • Proposed Reforms: Industry leaders support limited amalgamation, such as merging the Promotion Bureau and the Convention Bureau, provided that: Leisure and MICE (Meetings, Incentives, Conferences, and Exhibitions) sectors maintain separate budget lines. Private-sector leadership in marketing is preserved. • Sector Priorities: Recommendations focus on digitizing approvals and aligning training with modern human capital needs rather than centralizing governance. • Strategic Outlook: With tourism serving as a critical economic pillar, stakeholders argue that institutional stability is essential to maintain international branding and avoid reversing decades of progress. _Note: Summary based on industry veteran perspectives as of January 2026._
### 📈 Administration Over Policy: Reforming Sri Lanka’s Tax System
The current debate in Sri Lanka emphasizes that tax administration, rather than further policy changes, is now the primary driver for revenue growth and taxpayer compliance. While policy sets the rules, administration defines the lived experience of citizens and businesses. Core Insights • Experience vs. Rules: Public resistance stems less from tax rates and more from friction in the process—queues, complex forms, and inconsistent enforcement. • Trust as an Asset: Revenue collection depends on institutional trust. Opaque or intimidating administration pushes taxpayers toward the informal economy, while clarity fosters voluntary compliance. • Economic Impact: Frequent policy shifts (rate hikes/exemption cuts) directly hurt household incomes. Administrative reforms—like better call centers and digital portals—increase revenue without adding financial pain. Sector & Strategic Focus • SMEs & Professionals: These groups struggle with uncertainty and fear of penalties for honest mistakes. Service-oriented support is critical for their formalization. • ICT/BPM & Digitalization: Digitalizing the tax net (e.g., e-invoicing, RAMIS upgrades) is a key development tool, especially for the youth entering the workforce. • Apparel & Textiles: Streamlined administrative processes (like faster VAT refunds) are essential to maintain the cash flow of export-oriented sectors. Strategic Path Forward • Shifting the organizational mindset from "control" to "service" can produce outsized gains in revenue. • Strengthening internal coordination and standardizing procedures are prioritized over new legislation. • Effective administration serves as a social contract, transforming tax from "extraction" into "civic participation."
## TIN Now Mandatory for Vehicle Registrations in Sri Lanka 📈
Sri Lanka’s Department of Motor Traffic (DMT) has officially implemented a significant policy shift effective January 5, 2026, making the Taxpayer Identification Number (TIN) compulsory for key vehicular transactions. This move aims to bolster tax compliance and formalize the economy by linking asset ownership directly to the national tax system. • Core Requirement The mandate applies to all new vehicle registrations and ownership transfers. Applicants must provide their TIN alongside their NIC (for individuals) or Business Registration Number (for corporates) to process these transactions. • Target Demographics Under Inland Revenue Department (IRD) guidelines, a TIN is required or highly encouraged for: All individuals aged 18 years and above. All income earners (employment, business, or investment). Professionals (lawyers, doctors, engineers) and self-employed persons. Importers, exporters, and VAT-registered entities. • Exempted Categories To protect low-income groups and the agricultural sector, the following are currently exempt: Motorcycles and Three-wheelers. Tractors, Hand tractors, and Tractor trailers. • Impact on Owners Existing Owners: Those not currently selling or transferring their vehicles are not immediately affected. Future Transactions: Any future transfer of ownership will remain blocked until a valid TIN is provided. Business Sector: Vehicle dealers, leasing companies, and finance firms must now integrate TIN verification into their standard compliance workflows. • Strategic Goals This reform aligns with broader IMF-backed fiscal reforms to broaden the tax base and enhance digital governance. It allows the IRD to identify undisclosed wealth by cross-referencing high-value asset purchases with declared income profiles.
📈 Blueprint for AI-Powered Tax Digitalisation in Sri Lanka
Sri Lanka is eyeing a radical fiscal transformation inspired by the UK’s HMRC and the UAE’s Federal Tax Authority. The proposed blueprint shifts from paper-based compliance to a real-time, AI-driven revenue system to meet IMF targets and bridge the significant national tax gap. • Strategic Pillars & Technology RAMIS 3.0 Upgrade: Transitioning the system into a dynamic compliance engine using APIs for structured data submission. Unified Digital Taxpayer Account (UDTA): A single portal for citizens and businesses to manage liabilities and filings. AI-Readable Legislation: Converting tax laws into XML/JSON formats to allow automated compliance and searchability via APIs. • Sectoral & Investment Impact FDI Attraction: Introduction of legally binding Advance Tax Rulings (ATR) and public Tax Bulletins to provide the policy certainty required by global investors. SME Support: Radical simplification of fragmented tax laws to encourage voluntary compliance and reduce litigation. • AI Use Cases & Efficiency Risk-Based Auditing: Using Machine Learning to flag high-risk cases (top 1-2%), optimizing audit resources. Fraud Detection: Unsupervised learning to identify "fraud rings," duplicate filings, and under-reporting in real-time. Administrative Tools: Multilingual chatbots for 24/7 taxpayer assistance and automated pre-filled tax returns. • Governance & Workforce Adaptation Anti-Corruption: AI-driven internal audits to detect anomalous employee behavior and ensure a digital audit trail for all refunds. Professional Safeguards: Proposal for an "Automation Social Cost Levy" to fund reskilling for displaced workers in the finance and accounting sectors. Human-in-the-Loop: Mandatory "Human Review and Sign-off" for all AI-generated compliance submissions to maintain legal accountability.
📈 Police Alert: Sharp Surge in Online Financial Fraud 📈
The Sri Lanka Police have issued a high-priority warning regarding a spike in online financial scams, primarily targeting citizens via social media platforms like Telegram and WhatsApp. In response, law enforcement is launching a systematic 2026 awareness drive to combat daily reported incidents. • Core Threat Metrics • Growth: Significant YoY increase in digital fraud complaints. • Platforms: Social media, specifically Telegram and WhatsApp, are the primary channels for fraudsters. • Vulnerabilities: Unauthorized sharing of bank details, OTPs, QR codes, and passwords. • Top 9 Reported Scams • Online Loans: Advertisements for "instant loans" leading to excessive interest and harassment. • Investment & Crypto: Fraudulent high-return schemes often promoted via Telegram. • Phishing: Deceptive links impersonating banks or delivery services to siphon funds. • Apparel & Retail: Fake shopping pages on Facebook where items are never delivered. • Romance Scams: Impersonation to extract funds, often via "foreign gift" claims. • Job Frauds: Fake work-from-home offers demanding "registration fees." • Targeted Demographics: Specific schemes exploiting children (gaming scams) and the elderly (assistance requests). • Security Action Plan • Verification: Public urged to verify official pages and use only trusted platforms. • Reporting: Suspected fraud should be reported immediately to the Cyber Crime Unit of the CID. • Prevention: Citizens are cautioned against sharing sensitive banking information with unverified entities.
🚨 CID Investigates Cyber Breach of Ministry Website
The Criminal Investigation Department (CID) has launched a formal inquiry into a suspected cyberattack targeting the official website of the Ministry of Public Security. • Incident Overview: Multiple instances of unauthorized access were detected, leading to a compromise of the site’s integrity. A formal complaint was lodged by the Ministry Secretary on January 9, 2026. • Technical Irregularities: Authorities flagged "abnormal activity," including visible distortions and irregularities in the display of the national emblem on the website during the breach. • Response & Recovery: Sri Lanka CERT and the Information and Communication Technology Agency (ICTA) have intervened to restore the platform and reinforce its security framework. • Current Status: • A criminal investigation is underway by the CID to identify the source and extent of the intrusion. • A parallel internal ministerial inquiry has been initiated to assess internal protocols and potential vulnerabilities. • Context: This incident underscores the ongoing security challenges for ICT/BPM infrastructure and government digital assets, highlighting the need for robust cybersecurity to protect national information. Based on provisional reports from the Police Media Division.
⚖️ Essential Seminar: Safeguards Under Companies Act No. 12 of 2025
A high-level seminar on the newly amended Companies Act will be held on 27 January 2026 at NH Collection, Colombo, focusing on the heightened legal responsibilities for corporate leaders. • New Regulatory Landscape: The seminar addresses the significant new responsibilities and stringent penal sanctions introduced by the Companies Act No. 12 of 2025 that impact company secretaries and directors. • Key Compliance Risks: Despite clear objectives, several provisions in the amendment remain ambiguous, creating substantial risks for corporate professionals and their organizations. • Strategic Safeguards: Experts will discuss essential mitigation measures, including: • Formally approved policy frameworks. • Enhanced internal compliance procedures. • Clear documentation of duties to manage legal exposure. • Expert Panel: Key speakers include Dr. Aritta Wickramanayake, Nihal Jayawardena (Company Law Advisory Commission Chairman), and Kithsiri Gunawardena (LOLC Insurance Chairman), alongside regulators from the CSE and the Registrar of Companies. 📈 Context: These amendments represent a significant shift in corporate governance in Sri Lanka, emphasizing accountability and the need for robust internal legal safeguards.
📈 Hayleys PLC Flags Lending Limits as Major Growth Barrier
Sri Lanka’s largest diversified conglomerate, Hayleys PLC, has identified the reduction of the Single Borrower Limit (SBL) as a critical hurdle for large-scale corporate expansion. Speaking at the HNB Investment Bank Investor Forum, Executive Director Sarath Ganegoda highlighted that access to funding remains the "number one challenge" despite stabilising macroeconomic indicators. • Regulatory Constraints: The Central Bank of Sri Lanka (CBSL) has tightened lending limits to a single borrower/group to 25% of Tier I capital (previously 30%). This cap restricts large firms from securing the substantial capital needed for high-impact projects. • Growth vs. GDP: While Hayleys has maintained an 8-9% growth rate in USD terms over the last decade, Sri Lanka’s GDP has averaged only ~2%. The Group warns that double-digit growth is unattainable without external expansion or improved credit access. • Export Sector Stagnation: Tea remains the top export—a structure unchanged for 30 years—struggling at US$ 1.4–1.6 Bn. Hayleys aims for 50% of its US$ 1.6 Bn turnover to come from exports to remain a net forex earner. • Expansion Barriers: Sovereign constraints and rigid regulations hinder overseas investments, with Ganegoda noting extreme difficulty in obtaining approvals for even US$ 10 Mn in external investments. _Note: Figures based on 2025/26 interim performance and provisional regulatory data._
National Housing Policy to be Unveiled by March 🏘️
The Government of Sri Lanka is set to introduce a comprehensive National Housing Policy by March 2026, marking the first major update to the framework since 2014. The policy aims to shift away from historically "politicised" and poorly planned projects toward a more inclusive, ground-reality-based approach. • Core Objectives: The framework focuses on poverty alleviation, addressing internal displacement from past conflict, and providing solutions for post-disaster housing needs driven by increasing climate-related catastrophes. • Target Beneficiaries: Focus areas include urban slum clearance, low-income communities, public servants, and plantation workers. • Key Implementation Agencies: Programs will be primarily driven by the National Housing Development Authority (NHDA) and the Urban Development Authority (UDA). • Challenges & Reforms: • Integration of State agencies to streamline execution. • Securing consistent long-term funding and effective financing mechanisms. • Balancing construction demands with social welfare objectives. • Correcting "flawed approaches" previously influenced by a lack of understanding of local power dynamics by international partners. The policy is currently under revision to ensure sustainable and affordable housing across all income groups, addressing both complex rural and urban needs.
### 📈 SME Lending: The Risks of Market Intervention
Recent headlines suggesting banks are thriving at the expense of struggling SMEs have sparked calls for statutory interventions. However, economic analysis warns that artificial interference in credit markets could undermine Sri Lanka's recovery. • The SME Context Small and medium enterprises have faced a "perfect storm" of external shocks: the Easter Sunday attacks, Covid-19 lockdowns, the economic crisis (currency collapse and interest rate volatility), and recent climate disruptions like Cyclone Ditwah. While these events were beyond their control, their resulting inability to service debt has fueled the narrative for a "fairness probe" into credit enforcement. • Systemic Risks of Intervention Market experts argue that intervening in lending frameworks—such as imposing interest rate ceilings or altering parate execution (asset recovery) laws—poses significant risks: Financial Instability: Banks act as custodians; if credit mechanisms fail, the savings of the entire nation are at risk. Credit Contraction: Intervention can shrink the pool of loanable funds, leading to financial exclusion where even credible first-time borrowers are denied credit. Informal Markets: Distorting formal credit pricing often pushes businesses toward high-risk illegal lending. • Current Economic Outlook National Context: The CBSL Governor, Dr. Nandalal Weerasinghe, emphasized that maintaining the banking system's integrity is vital for national stability. Sector Support: Instead of price controls, the focus remains on targeted assistance. For 2026, the government has introduced the RE-MSME Plus scheme, offering 3% concessionary loans to disaster-hit businesses. Diversification: Strengthening credit markets is seen as the only sustainable path to investment-led growth and employment. _Note: Summary based on news reports and provisional economic commentary as of January 2026._ ---
CMTA Calls for Abolition of 15% Used Vehicle Import Depreciation 📈
The Ceylon Motor Traders’ Association (CMTA) has urged the government to remove the 15% depreciation allowance currently granted on used vehicle imports, citing significant revenue losses and market distortion. • Key Proposals: Abolish the 15% depreciation on CIF value for used vehicles, arguing many have near-zero mileage and prices comparable to brand-new units. Implement a structured depreciation table based on age, with a maximum cap of 10%. Ensure vehicles are registered within 3 months to prevent foreign currency leakage from stockpiling; penalties for non-compliance range from 4% to 40%. • Economic Impact: The CMTA claims the current policy creates "revenue leakage" for the state and lacks "plausible justification." Emphasizes that brand-new vehicles imported via authorized agents save foreign currency through manufacturer warranties, which cover parts and repairs for up to 5 years. • Market Fairness: The Association argues that if affordability is the goal, similar concessions should extend to the automotive authorized agent sector to ensure fair competition. The CMTA remains open to supporting a transparent, structured framework aligned with national revenue objectives.
## 📈 Port City Banking Amendments Risk 'Shadow Banking' System
Opposition MP Faiszer Musthapha has warned Parliament that proposed amendments to the Colombo Port City Economic Commission Act could destabilize Sri Lanka’s domestic economy and weaken financial regulation. • Regulatory Shift: The Bill allows the Port City Commission to issue offshore banking licenses independently of the Banking Act. Musthapha argued this creates a "shadow banking system" by shifting oversight away from the Central Bank's established expertise. • Financial Risks: Provisions allowing offshore banks to borrow foreign currency from domestic banks could strain national foreign exchange reserves. Furthermore, the lower capital requirement for offshore banks ($15 Mn) vs. domestic banks ($60 Mn) creates an uneven playing field. • Labor & Brain Drain: The removal of income tax exemptions for Sri Lankan residents employed in the Port City—amid already high personal tax rates—is expected to worsen the migration of skilled professionals. • Key Concerns: Systemic Risk: Parallel licensing frameworks may bypass stringent domestic safeguards. Regulatory Standards: Strict adherence to vague "international standards" (like Basel norms) could strip the Central Bank of the discretion needed to protect national interests. Investment Bottlenecks: Lack of statutory timelines for approvals hinders ICT/BPM and other high-value investments. The MP urged the Government to maintain the Central Bank as the primary regulator to prevent a "dangerous" decoupling of Port City operations from the national banking system.
SEC Probes Abnormal Wealth Trust Debut Movements 📈
The Securities and Exchange Commission (SEC) of Sri Lanka has identified key parties behind the "abnormal" price movements during the Wealth Trust Securities Ltd debut on 7 January. Initial findings suggest the actions were deliberate and primarily involved retail investors. • Investigation Status: The SEC has questioned several individuals and reviewed records to uncover the full picture. Officials confirmed that those identified are mostly retail investors using internet trading platforms without consulting licensed investment advisers. • Market Safeguards: Following the debut chaos, the Colombo Stock Exchange (CSE) now prohibits market orders on a security's first trading day. While a few investors attempted to place sell orders at "excessive prices" (reportedly reaching Rs. 25,000 against a Rs. 7.00 IPO price) on 8 January, new restrictions prevented execution. • Regulatory Action: The SEC warned that any confirmation of market manipulation will result in strict action under the SEC Act. Despite the volatility, authorities noted that most investors acted responsibly. • Sector Context: As a primary dealer in government securities, the stability of Wealth Trust Securities is vital for investor confidence in the financial services sector and the broader capital market. _Summary based on initial investigative findings as of 12 January 2026._
📈 Solar Industry Raises Alarms Over Draft National Electricity Policy
The Solar Industries Association (SIA) warns that several provisions in the new Draft National Electricity Policy could destabilize Sri Lanka's renewable energy growth and threaten its 70% green energy target by 2030. • Sector Impact & Scale • The renewable energy sector currently supports 400+ companies and provides employment to over 40,000 Sri Lankans. • Total installed capacity stands at 3,333 MW (as of Nov 2025), with 92% (3,042 MW) developed via the Feed-in Tariff (FIT) mechanism. • Critical Policy Concerns • Uncompensated Curtailment: Provisions allow the grid to cut solar/wind supply without financial compensation, undermining project bankability. • Abolishing FIT: Replacing fixed tariffs with competitive bidding for projects under 10 MW may collapse the SME-led solar and mini-hydro sectors. • Forex Risks: Requirement for LKR-denominated Power Purchase Agreements (PPAs) ignores that most equipment is imported in USD, discouraging FDI. • Key Recommendations • Implement a 1% annual curtailment cap with compensation for excess. • Maintain USD indexation for tariffs to protect debt servicing against exchange rate volatility. • Establish technical committees to determine fair PPA extension rates rather than a mandatory 65% tariff cut. • Economic Outlook Failure to address these issues could increase reliance on high-cost fossil fuels, leading to higher consumer tariffs and increased foreign currency outflows.
## Sri Lanka Launches National Digital Motor Insurance Card 📈
The Insurance Regulatory Commission of Sri Lanka (IRCSL) has officially introduced a permanent digital insurance card (e-card) to replace the traditional annual plastic cards issued to vehicle owners. • Strategic Shift: The move aims to phase out physical cards to reduce environmental pollution and cut the substantial financial costs associated with producing plastic cards for the insurance sector. • Enforcement & Integration: Sri Lanka Police officers received 500 tablet devices (Western Province) to access the Road Accident Data Management System. These devices will facilitate real-time roadside verification of the new digital e-cards. An additional 150 tablets were symbolically handed over to senior officers to streamline digital transitions. • Key Objectives: Beyond cost savings, the initiative addresses operational challenges and modernizes data management between the insurance industry and law enforcement. • Implementation Status: Launched on January 7, 2026; police training and hardware distribution are currently underway to ensure a seamless transition from physical to digital verification.
## 🛡️ Insurance Sector Braced for Global Compliance Standards
The Insurance Regulatory Commission of Sri Lanka (IRCSL), in collaboration with the Financial Intelligence Unit (FIU), conducted a high-level awareness session on AML/CFT/PWMD (Anti-Money Laundering/Countering the Financing of Terrorism/Proliferation of Weapons of Mass Destruction) compliance. The session, held via MS Teams on 17 November 2025, prepared the industry for the upcoming Mutual Evaluation (ME) by global bodies in 2026. • Participation & Reach Total Attendees: 589 professionals, including Board Directors, Senior Management, and Compliance staff. Sectors Represented: Life and General insurance companies, alongside insurance brokering firms. Stakeholders: Supported by the Insurance Association of Sri Lanka (IASL) and Sri Lanka Insurance Brokers Association (SLIBA). • Key Compliance Obligations National Risk Assessment: Insights on the latest legal frameworks and outcomes of the mock evaluation. Risk Mitigation: Emphasis on Customer Due Diligence (CDD), identifying Suspicious Transactions (STRs), and screening against UN Sanction Lists. Consequences of Non-Compliance: Discussion on the economic impact of being "grey/blacklisted," which could affect Sri Lanka’s foreign investment and global financial standing. • Strategic Focus The initiative aims to strengthen the financial services sector's integrity, ensuring the insurance industry contributes to national economic stability through robust oversight and ethical practices. 📈 ---
Sri Lanka Braces for 2026 AML/CFT Evaluation 📈
Central Bank (CBSL) Governor Dr. Nandalal Weerasinghe warns of "high stakes" as Sri Lanka prepares for its third Mutual Evaluation in 2026, a critical assessment of the nation's anti-money laundering and counter-terrorism financing framework. • Economic Risks of Failure: An adverse outcome could lead to FATF Grey Listing, causing: • Increased scrutiny of cross-border financial transactions. • Higher compliance costs and delays in international payments. • Reduced access to correspondent banking relationships. • Negative impacts on FDI, capital inflows, and remittance flows. • Key Evaluation Metrics: The assessment, coordinated by the Asia Pacific Group (APG), will measure: • Technical compliance with the FATF 40 Recommendations. • Effectiveness against 11 Immediate Outcomes. • Current Progress: Based on provisional 2025 data, the Financial Intelligence Unit (FIU) has: • Strengthened monitoring of stakeholder action plans. • Advanced amendments to core AML/CFT/CPF legislation. • Expanded analysis of Suspicious Transaction Reports (STRs). • Strategic Outlook: The Governor emphasized that "highest political will" and inter-agency coordination (Finance, Defence, Justice) are vital. Success is essential to maintain investor confidence and protect overall economic growth.
⚠️ Draft Terrorism Bill Risks GSP+ Access 📈
The proposed Prevention of Terrorism against the State Bill (PTSB) has sparked concerns over its compliance with international norms, potentially endangering Sri Lanka's critical trade preferences with the European Union. • Trade & Economy Impact The EU’s GSP+ concessions remain vital for Sri Lankan exports, particularly apparel & textiles and rubber, especially following recent global tariff shifts. Maintaining GSP+ is contingent on meeting international human rights and rule of law standards, which the current draft is accused of failing. • Key Legal Concerns • Normalization of Exception: The bill reportedly integrates emergency-style powers—such as proscribing organizations, curfews, and movement restrictions—into ordinary law without sufficient parliamentary oversight. • Broad Definitions: Critics argue the draft uses overbroad definitions of terrorism, which could lead to the targeting of dissenters rather than focusing on procedural exceptions for existing criminal acts. • Detention & Evidence: The PTSB is noted to mirror the existing PTA by allowing lengthy detention periods and high-pressure settings that may encourage forced confessions. • Status & Recommendations Based on provisional draft analysis, experts suggest a "procedural exception" model. This would limit the law to specific investigative powers for crimes already defined in other legislation (e.g., aviation or weapons laws), ensuring better alignment with the ICCPR and safeguarding national market access.
## CBSL Accelerates Financial Sector Consolidation & Resolution Reforms 📈
The Central Bank of Sri Lanka (CBSL) has reaffirmed its commitment to the Master Plan for Consolidation, focusing on systemic stability and long-term sustainability for the banking and non-bank financial sectors. • Strategic Consolidation: Efforts continue to merge banks and finance companies to achieve the scale and balance sheet strength necessary to support large-scale investments and economic growth. • Enhanced Monitoring: CBSL has commenced stricter oversight of finance companies using a revised Phase II assessment framework to improve operational efficiency and risk management. • Resolution Framework: Building on lessons from the 2022 crisis, significant progress was made in 2025 to manage distressed institutions. Full implementation of a robust resolution framework is expected by 2026. • Key Objectives: Improving financial inclusion and technology investment. Safeguarding depositor confidence through orderly resolutions. Aligning Sri Lanka’s financial system with international best practices. _Source: CBSL Annual Policy Address (Provisional Data)_ ---
📈 Garment Exports Gain Duty-Free Edge in UK Market
Sri Lanka's apparel & textiles sector is set for a major boost as the UK's liberalised Developing Countries Trading Scheme (DCTS) officially took effect on 1 January 2026. • Core Reform: Manufacturers can now source up to 100% of raw materials globally while maintaining zero-tariff access to the UK. This removes the "double transformation" rule that previously required two major manufacturing steps to occur within Sri Lanka. • Sector Impact: • The apparel industry accounts for over 60% of exports to the UK and supports ~1 million livelihoods. • The UK is Sri Lanka's second-largest garment market, valued at approximately US$ 675 Mn. • New rules allow Sri Lankan firms to access global supply chains on a level playing field with regional competitors. • Regional & Export Diversification: • An Asia Regional Cumulation Group of 18 countries has been established. • This allows exporters to source inputs from these regional partners while retaining preferential benefits, encouraging diversification in non-garment sectors where over 90% of products are now eligible for zero tariffs. • Economic Outlook: Based on provisional data, garment exports are expected to increase significantly under these arrangements, supporting national economic recovery and employment.
Govt. Flags Decline in Korean Job Placements 📈
The Sri Lankan government has addressed a significant drop in employment opportunities in South Korea, citing a decline from over 16,000 departures in 2022 to approximately 10,202 in 2025. • Overall Trends Departures facilitated by the government fell from 6,639 in 2022 to 3,712 in 2025. Private agency departures also dropped from 9,745 in 2023 to 6,490 in 2025. • Sector Breakdown (Current Registrations) As of January 2026, 10,122 Sri Lankans remain registered for placement: • Manufacturing: 5,820 (2025 quota set at 6,800) • Services: 2,518 • Shipbuilding: 1,391 (Only 32 contracts issued in 2025) • Fishing: 343 • Construction: 50 • Key Challenges The decline is attributed to Korean policy shifts, labor demand instability, and high rates of illegal overstays. Employer concerns regarding frequent job changes by Sri Lankan workers have also negatively impacted recruitment. • Mitigation & Diplomatic Push The government is negotiating to shift eligible candidates from the low-demand shipbuilding and service sectors into manufacturing. High-level diplomatic talks are ongoing to increase job quotas for Q1 2026 and improve the perception of Sri Lankan worker reliability. • Other Markets Placements in Italy remain stalled due to a lack of willing employers; a fresh MoU is currently being pursued to revitalize the overseas employment pipeline in Europe.
Govt. considers Pension Option for EPF Members 📈
The Sri Lankan government is currently discussing amendments to the Employees’ Provident Fund (EPF) Act to offer contributors the choice of a regular pension instead of a traditional lump-sum payment upon retirement. • Proposed Reforms The National Labour Advisory Council is evaluating an optional pension scheme to strengthen long-term income security for private sector and semi-government workers, particularly as the national population ages. The existing lump-sum withdrawal framework will remain an option for those who prefer it. • Fund Performance (End-2024) • Total Assets: Net worth rose 12.6% YoY to Rs. 4,375.7 Bn. • Contributions: Total inflows increased 11.3% to Rs. 234.4 Bn. • Net Position: Achieved a positive net contribution of Rs. 46.3 Bn (reversing a Rs. 5.3 Bn outflow in 2023). • Investment Income: Rose 6.8% to Rs. 513.8 Bn, supported by an 11% interest rate on member balances. • Sector Context The EPF remains the dominant social security mechanism, accounting for 81.0% of Sri Lanka’s superannuation sector assets. While current laws allow for a 30% early withdrawal for housing or medical needs, officials warned that frequent interim payments could weaken overall retirement protection. • Strategic Importance As the largest investor in government securities, the EPF is central to national fiscal stability. The proposed flexibility aims to mitigate risks for retirees while preserving the fund's role as a vital safety net for the labour market.
📈 Digital Trust: The Foundation of Sri Lanka’s $15 Bn Digital Economy
Supreme Court Judge Arjuna Obeyesekere and the Data Protection Authority (DPA) emphasized that Sri Lanka’s digital growth must be anchored by a robust trust architecture to ensure long-term economic value. • Core Economic Vision: The government aims to unlock US$ 15 Bn in value through the digital economy over the next decade. Success depends on shifting from technological adoption to "digital trust." • Regulatory Status: The Personal Data Protection Act (PDPA) No. 9 of 2022 is moving from a "future-oriented framework" to an urgent economic necessity. The DPA is currently being operationalized, with a phased implementation planned to allow the private and public sectors to adapt. • Sector Shifts: • Financial Services: Rapid transition from cash to a "cash-light" economy via QR codes, mobile wallets, and digital KYC (Know Your Customer) processes. • ICT/BPM & AI: Concerns raised over AI-driven decision-making. Future trust depends on transparency in how algorithms "infer, predict, and decide" rather than just how data is stored. • E-commerce: Platform-based commerce is now a routine layer of everyday life, requiring "privacy by design" to sustain consumer confidence. • Critical Warning: Connectivity alone does not drive progress; "trust moves people." Without accountability in automated systems, digital platforms risk scaling harm as efficiently as they scale revenue. • Next Steps: The DPA will focus on capacity building, awareness programs, and establishing complaint-handling mechanisms before announcing the Act's effective enforcement date.
## 🛡️ IPS Study: SGBV Risks for Migrant Domestic Workers
The Institute of Policy Studies (IPS) has released a critical study on sexual and gender-based violence (SGBV) faced by Sri Lankan female migrant domestic workers in the Middle East, calling for urgent systemic reforms. • Key Findings: Research identifies a "continuum of violence" including harassment, deception, wage theft, forced labor, and violations of basic human needs. • Systemic Drivers: Vulnerabilities are heightened by the Kafala sponsorship system, informal work arrangements, and extreme economic pressure driving migration. • Data Source: Findings are based on official complaint data from the Sri Lanka Bureau of Foreign Employment (SLBFE) and key informant interviews, reflecting post-pandemic realities. • Proposed 4-Pillar Action Plan: • Pre-emptive risk identification and awareness programs. • Efficient and accelerated reporting mechanisms for victims. • Support structures to facilitate positive coping mechanisms. • Binding penalty measures to deter future SGBV incidents. The study serves as an urgent call to action for recruitment agents and the government to strengthen protection frameworks for this vital segment of the workforce. 📈 --- Would you like me to find more details on the specific SLBFE complaint statistics mentioned in the full IPS report?
🐘 Sri Lanka's Human-Elephant Conflict: A Growing Crisis 📉
The recent 'Ditwah' catastrophe has intensified the long-standing Human-Elephant Conflict (HEC) debate in Sri Lanka, exposing critical land management flaws and urging immediate rationalization of elephant and human populations. • Current Situation (2024 Estimates): • Sri Lanka's land area: 65,210 sq km. • Human population: 23.3 million. • Elephant population: 7,450. • 70% of wild elephants live outside dedicated areas, sharing 44% of the landscape with humans due to habitat and food scarcity. • 30% of land is landslide-prone, with 34% of the human population residing there. • Tragic Casualties: • 2023: 488 elephant deaths (highest on record) and 187 human fatalities. • 2011 - mid-2025: A staggering 4,600 elephants and 1,528 humans have died in HEC clashes. Experts warn 2025 is trending towards higher casualty figures. • Economic Burden: Billions in taxpayer money and foreign exchange are reportedly wasted on ineffective elephant control measures. Farmers face significant crop destruction, impacting livelihoods and national food economy, further aggravated by 'Ditwah'. • Proposed Long-Term Solution: • Determine 'Convenient Total Carrying Capacity' (CTCC): Establish a sustainable elephant population limit for 10-year periods, considering ecological and human needs. • Export Surplus Elephants: If the population exceeds CTCC, export surplus elephants to zoos in needy countries through diplomatic channels, ensuring breed maintenance. • Birth Control: Implement short and medium-term sterilization/birth control measures. • Diplomatic Efforts: Ease international restrictions on wild elephant exports/imports. • Anticipated Benefits: Reduced crop damage, improved economic growth, more habitat for elephants, additional land for humans and crops, regulated elephant nutrition, forest protection, and a new route to earn foreign exchange, saving billions currently spent on control measures. • Call to Action: Proposes a Presidential Task Force, including experts from DWC, Land Management, environmental groups, and farmer representatives, to deliberate on these proposals and submit a report within three months.
🇱🇰 Sustainable Agriculture Program Launched with Rs. 800 Mn Loan Facility from 2026! 📈
The Cabinet of Ministers has approved a new concessional agricultural loan scheme, the "Sustainable Agriculture Program," to boost rural livelihoods and national economic growth. • Launch: To be rolled out annually starting 2026. • Funding: Financed by a revolving fund under the existing Smallholder Agribusiness Partnerships Program (supported by GoSL and IFAD). Recoveries from current loans will feed into this new "Sustainable Agricultural Fund." • Initial Allocation: Rs. 800 million from the fund for 2026 implementation. • Loan Categories & Terms: • Individual Loans: Up to Rs. 5 million through agricultural and Samurdhi banks. • Interest Rate: 2% per annum. • Repayment: Max 5 years. • Grace Periods: Up to 12 months for applications/joint ventures; 6 months for working capital. • Bulk Loans: Capped at Rs. 500,000 per beneficiary. • Interest Rate: 2% per annum. • Repayment: Max 3 years. • Eligibility: Individuals and institutions involved in a wide range of agricultural and agri-related activities, including cultivation, processing, value addition, input supply, production, and exports. • Objective: To enhance productivity, encourage value addition, and improve incomes across the agricultural value chain, ensuring continuous concessional credit through the revolving fund.
Cabinet Approves 7 New Industry Consultancy Committees 🇱🇰
The Cabinet of Ministers has greenlit the establishment of seven new Industry Consultancy Committees to boost policy coordination and address gaps in industrial and entrepreneurship development. This expands on the existing 20 Consultancy Boards already in operation. • Purpose: To strengthen evidence-based policymaking, enhance industry participation, and support sustainable growth by aligning government policies with industry needs. • New Sectors Covered: Indigenous & Traditional Medicine Confectionery Production Traditional Handicrafts Chicken-Related Industries Ornamental Fish & Seaweed Creative Crafts Event Management • Committee Structure: Each committee will comprise up to 25 members, drawing expertise from State institutions, commercial boards, universities, research bodies, and industry professionals. • Initiative: Proposed by Industry and Entrepreneurship Development Minister Sunil Handunneththi, aiming to extend structured consultation to previously uncovered industry segments.
🚨 FIU Collects Rs. 9.5 Mn in Penalties from Reporting Institutions 📈
The Financial Intelligence Unit (FIU) of Sri Lanka has collected Rs. 9.5 million in administrative penalties from various reporting institutions. • These penalties were imposed between July and September 2025. • The fines were due to non-compliance with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations. • Penalties were administered under the Financial Transactions Reporting Act (FTRA), No. 6 of 2006, with amounts scaled based on violation gravity. • All collected funds have been transferred to the Consolidated Fund.
📈 MSMEs Accuse Banks of Usury, Call for CBSL Action
The Ceylon Federation of MSMEs has formally complained to the Central Bank of Sri Lanka (CBSL) about excessive lending rates charged by banks, despite significant policy rate cuts. • Key Concern: Banks are not proportionately passing on policy rate reductions to borrowers, leading to inflated lending spreads. • Economic Disconnect: While CBSL's Overnight Policy Rate (OPR) was 7.75% by Dec 5, the Average Weighted Prime Lending Rate (AWPLR) remained significantly higher at 8.74%. • Impact on MSMEs: This divergence disproportionately burdens MSMEs, hindering their recovery, investment, and job creation post-2022 economic crisis. • Bank Profits: The Federation highlighted a sharp rise in bank profits (Profit After Tax) during the 2022-2024 period, coinciding with high interest expenses for MSMEs. • Call to Action: The MSME body urges stronger regulatory intervention from CBSL to ensure fair monetary policy transmission, prevent unjustified widening of lending spreads, and demands that banks return excess interest charged to MSME borrowers.
🚨 Presidential Emergency Powers in Sri Lanka: A Legal Showdown 🇱🇰
• A recent appraisal delves into the Sri Lankan Supreme Court's landmark 2022 ruling on the Acting President's proclamation of emergency (July 17, 2022) during a period of intense economic crisis and civil unrest. • The emergency was declared amidst severe fuel/food shortages, widespread protests, mob violence (including a MP's murder, torching of official residences), and attempts to disrupt Parliament's election of a new President. • In Ambika Satkunanathan v. Attorney General, a divided Supreme Court majority ruled the Acting President violated fundamental rights by declaring a nationwide emergency without adequately considering less drastic measures provided by the Public Security Ordinance (Part III). • The dissenting judges argued that once objective conditions for an emergency are established, the President isn't mandated to consider alternative, lesser options. • The article critically views the majority decision, stating it's "demonstrably at variance with established authority" and risks "judicial overreach" by substituting judicial judgment for executive discretion. • It highlights global precedents showing judicial restraint in reviewing emergency powers, recognizing the Executive's unique role, expertise, and need for swift, decisive action to maintain public order and confidence during national crises.
📈 Deloitte Sri Lanka CFO Conclave 2025: Navigating Financial Leadership in a New Era
Deloitte Sri Lanka recently hosted its 'CFO Conclave 2025 – Leading with Insights,' bringing together leading finance professionals to discuss the evolving role of CFOs amid increasing transparency, regulation, and technology. • The forum highlighted how finance functions can adapt to growing regulatory expectations while driving strategic transformation and resilience. • Key insights shared: Regulatory Updates: Discussion on International Financial Reporting Standards (IFRS) 18 (effective Jan 2027) for enhanced comparability in profit-and-loss, and IFRS 19 for simplified disclosure requirements. CA Sri Lanka Code of Ethics 2025 (aligned with IESBA 2024) and the Companies (Amendment) Act No. 12 of 2025 mandating beneficial-ownership disclosure, emphasizing stricter governance and board-level accountability. Taxation: Focus on Inland Revenue Department's transfer pricing regulations, the Advance Pricing Agreement (APA) framework for predictability, and updates to foreign exchange regulations, including outward investment frameworks and allowances for exporters. AI Governance: Addressing emerging risks like bias, data leakage, and model drift, urging CFOs to embed governance principles across the AI lifecycle for financial integrity. • The Conclave reinforced that modern CFOs are increasingly becoming catalysts for transformation, governance, innovation, and long-term value creation, moving beyond just financial accuracy.
🇱🇰 Green Taxation: Paving the Way for Climate Resilience & Fiscal Strength 📈
Sri Lanka faces critical economic and environmental challenges, exacerbated by climate shocks like Cyclone Ditwah. Green taxation emerges as an essential fiscal tool to both reduce environmental harm and build resilience. • What it is: Green taxation integrates environmental responsibility into the tax system by pricing pollution and resource use. It aims to steer businesses and households towards greener choices, supporting fiscal recovery while curbing degradation—a threat to food security, tourism, and public health. This also positions Sri Lanka to attract green investment. • Current Gaps: Sri Lanka's progress is slow due to: • Low public awareness and misunderstanding. • Varying industry readiness, with some export-oriented manufacturing adapting while domestic industries lag. • Fragmented, outdated, and weakly enforced environmental taxes. • Weak monitoring systems for emissions and pollution. • Global Insights: Successful models from Sweden (carbon tax), Japan (vehicle incentives), Singapore (plastic/waste taxes), and Germany (eco-taxes for renewable energy) highlight the importance of gradual introduction, transparent communication, and reinvestment of revenue. • Potential Risks: Challenges include a regressive impact on low-income groups, competitiveness concerns for small businesses, enforcement gaps, public resistance, and potential misuse of revenue. Thoughtful design and public engagement are crucial. • Way Forward for Sri Lanka: Key steps include: • Introducing a National Green Tax Policy Framework. • Phased, sector-focused rollout (e.g., plastics, transport, construction, energy). • Ensuring revenue transparency by earmarking funds for climate action (e.g., renewable energy, climate-resilient agriculture). • Supporting industries with green transition financing. • Strengthening data systems and monitoring technology. • Launching nationwide awareness campaigns. • Continuously learning from global best practices. Inaction is an expensive choice. A well-designed green tax framework can be a national shield and a springboard for long-term resilience, turning climate risks into opportunities.
Cabraal Discharged Conditionally, Ordered to Compensate CBSL 🏛️
• Former CBSL Governor Ajith Nivard Cabraal has been granted a conditional discharge by the Colombo High Court. • He is required to compensate the Central Bank of Sri Lanka (CBSL) for losses incurred from investments in Greek Government treasury bonds. • The compensation amount is a little over Rs. 1.8 billion (specifically Rs. 1,843,267,595.65), to be transferred to CBSL within three months. • Failure to comply with this order will result in further indictment. • Cabraal was accused of causing financial loss to the Government between 2011 and 2012. • His legal team argued that while his participation in the decision couldn't be denied, he had no intentional intent to cause loss and acted based on recommendations from Deputy Governors and senior officers. • The Commission to Investigate Allegations of Bribery and Corruption (CIABOC) agreed to withdraw the indictment under s. 67 (3) of the Anti-Corruption Act 2023, conditioned on the payment. • Four other senior Central Bank officers accused in the case were acquitted.
🚨 Cyclone Ditwah Exposes Sri Lanka's Early Warning Gap 🚨
Cyclone Ditwah in late November highlighted a critical weakness in Sri Lanka's disaster management: the gap between accurate early warnings and public response. • Despite The Meteorological Department, Irrigation Department, and National Building Research Organisation issuing continuous, accurate warnings well in advance for flooding, landslides, and water hazards, public preparedness and community reaction fell short, leading to significant property damage and loss of a few hundred lives. • While the technical aspects of early warning systems, supported by technological advancements, functioned effectively, the translation of these warnings into action remains critically weak. • Key reasons for poor public response included underestimation of hazard severity, treating warnings as routine, lack of specific guidance on actions, and community resistance to evacuation. • The article emphasizes the urgent need for: • Continuous community engagement, education, and preparedness training. • Strengthening community-level disaster preparedness programs involving schools, religious institutions, and community-based organizations. • Simplifying risk communication to ensure public understanding and prompt action. • With climate change intensifying extreme weather events, cultivating a culture of preparedness is crucial for Sri Lanka to mitigate future disaster impacts.
Serena Williams Fuels Comeback Speculation, Then Denies It 🎾
• Serena Williams has filed necessary paperwork for a return to professional tennis, re-entering the drug testing pool. • However, the 23-time Grand Slam singles champion, who retired after the 2022 US Open, swiftly denied any comeback, stating on social media: “I’m NOT coming back. This wildfire is crazy”. • The International Tennis Integrity Agency confirmed Williams, 44, is back on the list of players registered for the drug testing pool, with her name appearing on the most recent document published on October 6. • The reason for her re-entry into the testing pool while denying a return remains a mystery, as joining the list invites visits from doping officials and requires players to disclose their whereabouts for one hour daily. • Retired players must be in the testing pool for six months before being eligible to compete professionally again. A potential return would be possible from April, if her re-entry was effective from October 6.
🚨 SEC Sri Lanka Issues Alert on Unlicensed Entity 'Gladius South Asia' 🚨
• The Securities and Exchange Commission of Sri Lanka (SEC) has issued a public alert regarding Gladius South Asia. • Gladius South Asia is not licensed by the SEC to operate as a market participant in Sri Lanka or overseas. • The entity reportedly claimed to be licensed by the Financial Conduct Authority (FCA) in the United Kingdom. • However, the FCA has officially confirmed that Gladius South Asia is not registered with the UK regulator. • The SEC emphasizes investor caution when dealing with entities making unverified regulatory claims.
🚨 Sanasa Life Insurance Registration Suspended!
The Insurance Regulatory Commission of Sri Lanka (IRCSL) has suspended Sanasa Life Insurance Company PLC's registration to conduct long-term insurance business. • The suspension commenced on December 5, 2025, and will last for three weeks, concluding on December 26, 2025. • This action was taken by the IRCSL under Sections 18(1)(d), (f), (g), and (h) of the Regulation of Insurance Industry Act No. 43 of 2000. • The company made this disclosure to the Colombo Stock Exchange (CSE) in compliance with listing rules.
🇱🇰 Sri Lanka's Investment Pitch & Climate Finance Call in Newsweek Interview 📈
President Anura Kumara Dissanayake outlined Sri Lanka's economic recovery strategy and climate adaptation needs in a Newsweek interview. • Core Challenge: Breaking the cycle of setbacks (debt distress, Cyclone Ditwah) to achieve sustainable and equitable development amidst overlapping crises. The goal is to prove Sri Lanka's resilience and viability. • Geopolitical Stance: Maintains autonomy to work with major partners (India, China, US) without viewing relationships as a "balancing act." • India: Closest neighbour, first responder. • China: Strong economic & political partner, with existing commercial projects (Hambantota, Port City) managed to protect national interest & sovereignty. • United States: Largest export market, sought for market access, climate finance, and technology partnerships. • Investment Agenda: • Aims for a transparent, rules-based investment regime to ensure certainty, consistency, and confidence. • Introducing a single-window approval system and drafting a new Investment Protection Act. • Focus on attracting US investment in digital infrastructure, manufacturing, and renewable energy. • Climate Finance & Resilience: • Urgent need for climate finance following multi-billion dollar losses from Cyclone Ditwah. • Calls for grants for early warning systems, resilient infrastructure, and coastal protection. • Emphasizes the need for debt sustainability frameworks to evolve for climate-vulnerable countries. • Plans to overhaul disaster management systems for better preparedness and response. • Economic Stability: Balancing increased government revenue and tax base broadening with protecting social spending, while adhering to IMF parameters.
🎉 Binance Secures Landmark Global License Under ADGM Framework! 🇦🇪
Binance, the world’s largest crypto exchange, has achieved a global first by securing comprehensive regulatory approval from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). This landmark approval covers Binance's global platform, Binance.com. • Global Standard: This makes Binance the first crypto exchange to operate under ADGM's "gold-standard" regulatory framework, setting a new benchmark for digital-asset regulation worldwide. • Three Regulated Entities: The approval encompasses three distinct entities operating within ADGM: • Nest Exchange Limited: Approved as a Recognised Investment Exchange (RIE) for spot and derivatives trading. • Nest Clearing and Custody Limited: Approved as a Recognised Clearing House (RCH) for clearing, settlement, and secure custody. • Nest Trading Limited: Approved as a Broker-Dealer for "off-exchange" offerings like OTC trading. • Strategic Impact: • Strengthens Binance's commitment to compliance, transparency, and user protection, providing regulatory clarity for its global operations from ADGM. • Reinforces the UAE's position as a leading international hub for financial innovation and digital assets. • Scale: Binance boasts over 300 million registered users globally and more than US$ 125 trillion in cumulative trading volume. • Operational Start: ADGM-regulated activities for Binance.com are set to commence on January 5, 2026.
⚡️ ADB Approves US$ 100M for Sri Lanka Power Sector Reforms
• The Asian Development Bank (ADB) has approved a US$ 100 million policy-based loan to strengthen power sector governance and financial sustainability. • Core Reform: The financing will accelerate the unbundling of the Ceylon Electricity Board (CEB) into independent successor companies (generation, transmission, system operation, distribution), mandated by the Electricity Act of 2024/2025. • Financial Viability: Program supports implementing cost-reflective tariffs and a comprehensive debt restructuring plan for CEB, including transparent debt allocation to the new entities to enhance creditworthiness. • Growth & Investment: A key focus is strengthening renewable energy development and fostering private sector participation through competitive procurement for large-scale projects. • Inclusion: The program promotes gender equality and social inclusion by maintaining lifeline tariffs for vulnerable groups and supporting women's leadership in the energy sector. • ADB will provide an additional US$ 2.5 million technical assistance grant for capacity building and developing business/power system plans for the successor companies.
🚨 CBSL Orders Debt Relief & Low-Interest Loans for Flood/Cyclone Affected!
• Relief Scope: Central Bank (CBSL) has directed all licensed banks to extend temporary debt relief and new credit support to individuals and businesses hit by recent cyclonic and flood disasters. • Request Deadline: Borrowers must request assistance by 15 January 2026. • Key Moratorium: Banks may suspend repayments for up to six months. • New Loan Rate: New facilities (up to two years) must have interest rates capped at 9%. • Fee Suspensions: All late fees, penal interest, and cheque return charges must be suspended until 31 January 2026. • CRIB Directive: Banks are directed not to reject new loan applications solely based on CRIB records. • Compliance: Relief measures are mandated under CBSL Circular No. 04 of 2025.
🇱🇰 CBSL Advisory: Handling Flood-Affected Currency Notes
• The Central Bank of Sri Lanka (CBSL) has issued a notice regarding currency notes potentially damaged or exposed to water due to recent adverse weather conditions. • The public is strongly advised to follow the steps outlined by the CBSL to prevent further deterioration of these affected notes. • Adhering to the instructions will ensure proper handling and management of the damaged currency.
🚨 SL Plans Major Tariff Policy Overhaul by Mid-2026 📈
• The Trade Ministry is set to introduce a comprehensive National Tariff Policy by mid-2026, replacing the current "patchwork, discriminatory," and highly complex system (identified by World Bank). • Core Goal: Shift from a revenue-driven, protectionist structure to a predictable, simplified, and facilitative regime to boost export competitiveness and global value chain integration. • Key Pillars of Reform: • Establishing Predictability & Consistency. • Simplification (dramatically reducing para-tariffs). • Replacing protectionism with time-bound facilitation for infant industries. • Enabling global participation by lowering input costs (raw materials, capital goods). • The policy aims to transform inward-looking SMEs into export-oriented firms and strengthen diversification efforts. • Broader Trade Agenda: Government is reviewing existing FTAs, pursuing new market access (Asia, Africa, Middle East), and actively evaluating an invitation to join the ASEAN Free Trade Area (AFTA). • Facilitation: Reforms include accelerating WTO protocols (14 IP agreements in 3 years) and implementing the Single Window project to address customs bottlenecks, aiming to make Sri Lanka a "compliant, predictable, and investment-friendly" economy.
📢 Treasury Directs Insurers to Fast-Track Ditwah & Flood Claims 🌊
• Treasury Secretary Dr. Harshana Suriyapperuma met with IRCSL and insurance CEOs to push for the immediate settlement of Cyclone Ditwah and flood-related claims. • The move is essential for national economic recovery, supporting income generation, and restoring business operations for thousands of distressed families and businesses. • Key economic sectors severely impacted and needing prompt claim payouts include tourism, Small and Medium Enterprises (SMEs), and export-oriented industries. • The Insurance Regulatory Commission of Sri Lanka (IRCSL) is closely monitoring the process to ensure transparency and speed, prioritising immediate relief. • IRCSL Hotline: Policyholders unable to contact their insurance companies can call the IRCSL for assistance (077 241 8511).
SL Kicks Off National Campaign to Combat Digital Violence Against Women & Girls 💻
• The '16 Days of Activism Against GBV' national program was launched by UNFPA, the Ministry of Women & Child Affairs, and supported by the Government of Canada, focusing on the global theme: "UNiTE to End Digital Violence." • Key Findings (2025 Study): The most common online harms reported are creation of fake profiles (36.9%) and sharing obscene texts/videos (36.9%). Unauthorised exposure of personal info (doxxing) and gender trolling were also significant (24.3% each). • Tech Gaps: UNFPA highlighted that current AI tools for digital safety are unable to effectively detect hate content in Sinhala or Tamil, noting a crucial safety gap in Natural Language Processing (NLP). • Govt. Action & Legal Reform: - PM urged victims not to remain silent and guaranteed comprehensive support frameworks are available. - The Minister of Women and Child Affairs detailed plans for urgent review and amendment of the Penal Code & Cyber Laws to adequately criminalise and prosecute all forms of Technology Facilitated GBV (TFGBV). - Existing Penal Code Sec 345 (sexual harassment) allows for up to five years imprisonment, a fine, or both. • New Mechanisms: - Sri Lanka CERT is developing a new E-safety web portal, linked directly to resolving organisations, to allow citizens to report violations. - The UN is supporting the Government to build a central, safe reporting mechanism for both online and offline violence. • Support Hotlines: Women and Children’s Desk (109), National Hotline (1938), SLCERT (101), Mithuru Piyasa (070 261 1111), Women In Need (077 567 655).
🚨 Cyclone Ditwah Damage Data Collection Underway: Deadline Dec 16
• The Ministry of Industries has initiated a mechanism to collect data on industries affected by Cyclone Ditwah. • Affected industrialists are urgently requested to submit the necessary information through the dedicated system. • Crucial Deadline: Data collection is scheduled to be completed by 2:00 PM on December 16, 2025. • Submission portal is accessible via: www.industry.gov.lk. • Assistance for submissions can be obtained from Ministry of Industries and Entrepreneurship Development officers stationed at respective Divisional Secretariat and District Secretariat offices.
🇱🇰 CBSL & SLAASMB Ink MoU to Sharpen Financial Sector Scrutiny 📈
• The Central Bank of Sri Lanka (CBSL) and the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) signed an MoU on 1 December. • The agreement establishes a framework for coordination and information sharing to enhance the oversight of banking and financial institutions. • CBSL's Role: Prudential regulator focused on operational stability. • SLAASMB's Role: Inspecting financial statements for strict compliance with Sri Lanka Accounting & Auditing Standards. • Outcome: The systematic sharing of information will significantly strengthen regulatory activities, leading to enhanced financial stability and greater accountability in the financial sector.
⚙️ Sri Lanka Moves to Digital Tax: RAMIS Upgrade Approved!
• The Cabinet has approved the engagement of Singapore-based NCS Solutions Ltd. to upgrade the Inland Revenue Department’s (IRD) Revenue Administration Management Information System (RAMIS). • Key Feature: The upgrade will introduce a secure Web API facility for VAT-registered individuals, enabling more efficient interface with digital tax systems. • Strategic Goal: This is the critical initial stage toward implementing a full electronic invoicing (e-invoicing) system in Sri Lanka. • Context: The move aligns with global trends aimed at modernizing tax administration to enhance transparency, curb evasion, and streamline business transactions. • Proposal was presented by President Anura Kumara Dissanayake in his capacity as the Minister of Finance.
🚨 Customs Automation Boost: SLC extends UNCTAD ASYCUDA pact until 2027 📈
• Sri Lanka Customs (SLC) has renewed its technical assistance agreement with the United Nations Conference on Trade and Development (UNCTAD) to further enhance its automated revenue collection system. • The Cabinet approved the sixth addendum to the partnership, extending UNCTAD's support until June 2027. • The decision ensures continuity in modernising customs operations and improving automation for faster, more efficient service delivery. • The move aligns with structural reforms (dating back to IMF recommendations in 1991) focused on automating customs processes using the ASYCUDA system. • The renewed pact includes two specialised training programs for SLC staff, focusing on enhancing functions of the ASYCUDA World system, ASYCUDA, and ASYHUB platforms.
🌪️ Cyclone Ditwah Aftermath: Sri Lanka Faces Call for Structural Reform
• Catastrophic Impact: Cyclone Ditwah, which struck on 27 November, caused widespread flooding, catastrophic landslides, leaving hundreds dead, many missing, and millions displaced, marking it among the most severe disasters in recent memory. • Systemic Failures: The crisis exposed major weaknesses in institutional preparedness, urban planning, and the lack of strict enforcement of land-use regulations. Many of the worst-hit properties were located in warned floodplains and slopes. • Private Sector Conduct: "Some" companies faced criticism for prioritizing commercial activities (e.g., Black Friday sales) over employee safety, failing to implement WFH or allow early departure. Traders were also noted for accruing profits on essential food items. • Relief & Solidarity: Rescue and recovery efforts were mounted by tri-forces, Police, and volunteers. Regional support was rapid, notably from the Indian aircraft carrier INS Vikrant, providing helicopters and relief supplies. • Path to Resilience: The tragedy is a critical turning point, demanding structural reform—including rebuilding infrastructure to higher standards, integrating climate risk into national planning, and enforcing accountability—to ensure future storms are less destructive.
SL Disaster Relief: Radical Shift Towards Transparency & Accountability 📈
The government's response to the 2025 Cyclone Ditwah disaster relief marks a radical departure from the 2004 Tsunami era, prioritizing discipline, integrity, and public trust. • Tsunami 2004 Governance Failure: The past was marred by fragmentation, absence of a centralized mechanism, politicization of aid distribution, and misappropriation of hundreds of thousands of dollars’ worth of aid (Auditor General’s findings). Funds often bypassed the Central Bank, weakening economic stability. • Current Accountable System (2025): The Ministry of Finance and Economic Development (MOFED) and the President’s Media Division (PMD) issued clear, published instructions on Nov 29, 2025. • Key Mechanism: All domestic and international contributions must be routed through designated Central Bank accounts. • Strategic Benefits: This centralized system ensures full transparency, sets out clear auditing and oversight requirements, and strategically strengthens Sri Lanka’s foreign reserve position during the emergency. • Goal: The new framework aims for a response that is audited, traceable, serves citizens equally, and functions above party politics, rebuilding the public trust lost two decades ago. • Donor Note: All donors must strictly follow MOFED/PMD guidelines to ensure funds reach the intended beneficiaries and uphold credibility.
🇱🇰 MSME Recovery Blueprint: Essential for Post-Cyclone Economic Resilience
• Micro, Small & Medium Enterprises (MSMEs) are the backbone of Sri Lanka's economy, accounting for over 90% of all enterprises, contributing ~52% to GDP, and providing ~45% of employment. • Cyclone Ditwah and subsequent flooding threaten thousands of these businesses, which were already severely weakened by the COVID-19 pandemic, the 2022-23 economic crisis, and high interest rates. • A comprehensive, three-phase policy blueprint is urgently required to prevent a deep collapse and secure economic recovery: Phase 1: Immediate Relief • Focus on rapid, targeted unconditional grant support for businesses in disaster-hit divisions. • Implement temporary tax deferrals, penalty waivers, and fast-track VAT refunds. • Central Bank/Banks to provide short-term loan moratoriums and necessary regulatory flexibility. Phase 2: Recovery & Reconstruction • Introduce concessional "build-back-better" credit lines with below-market rates for replacing assets and premises. • Utilize Government public procurement with temporary preferences for affected local MSMEs. Phase 3: Building Long-Term Resilience 📈 • Integrate MSME resilience as an explicit objective in national disaster-risk planning. • Develop affordable, risk-sharing mechanisms like index-based insurance and group schemes. • Promote green and climate-resilient MSME investment through tax incentives and specialized loan products. • The proposal emphasizes that acting decisively now is critical to convert tragedy into a turning point towards a more resilient and sustainable economy.
New Duty-Free Mechanism for Overseas Disaster Relief Donations 🚨
• The Government has introduced a streamlined procedure to expedite the clearance and distribution of essential material aid donated from abroad due to the current disaster. • This mechanism allows all material aid to be cleared free of all tariffs and charges (duty-free clearance), encouraging foreign countries, organizations, individuals, and Sri Lankans abroad to donate. • Key Condition for Duty-Free Status: All goods must be addressed directly to: The Secretary, Ministry of Defence, Disaster Management Centre (DMC), Vidya Mawatha, Colombo 07. • If addressed to another local party, that party must agree to hand the donation over to the DMC to qualify for duty-free status; otherwise, normal customs procedures will apply. • Material assistance is permitted via any mode of transport. • Guidelines & Essential Goods List: Available at www.customs.gov.lk and www.donate.gov.lk. For further details, contact the hotline: +94 70 475 2823.
Royal College 'SAGA 2025' Fundraiser Under Scrutiny Over Alleged Financial Malpractice
• Royal College alumnus Padmasena Dissanayake has sent an Open Letter to Prime Minister/Education Minister Dr. Harini Amarasuriya, raising alarms over the collection of money for the "SAGA 2025" event organised by the School Development Society (SDS). • Allegations suggest the school administration and organisers are treating the PM's directive against unauthorised collections as "mere words," questioning if the institution is above the law. • Key Financial Irregularities Alleged: • Money is reportedly not being collected through official SDS bank accounts, leading to a complete lack of transparency and zero accountability. • No receipts are issued for these collections. • Allegations also point to the bypassing of standard procurement guidelines for costumes, with organisers opting for a single supplier. Dissanayake suggests the procurement decision was allegedly delayed intentionally to justify a shortcut around tender procedures. • Parents are reportedly forced to sign a "declaration of willingness," which frames the mandatory fee (Rs. 4,000 to Rs. 6,500 per costume for over 600 students) as a voluntary contribution. Parents remain silent due to fear of victimisation of their children. • The letter urges the Prime Minister to intervene immediately to rectify the situation.
🎥 President Dissanayake Offers Solutions to Film Industry Issues 🤝
• President Anura Kumara Dissanayake met with film distributors and producers to address their unresolved issues and provide "reasonable solutions." • The President stated that Sri Lankan audiences must be given the opportunity to watch international films while ensuring the domestic industry is safeguarded, citing cinema's contribution to spiritual and cultural development. • Key issues discussed included irregularities in Value Added Tax (VAT) payments and limitations faced in expanding the industry. • Film industry representatives reported achieving their highest-ever revenue in history in 2025 and requested continued government support to sustain this growth.
💎 Cabinet Approves Major Reforms to Boost Sri Lanka's Gem Industry 📈
The Cabinet of Ministers has approved a series of regulatory measures aimed at promoting the nation's gem industry by streamlining imports and simplifying taxation. • Key Approvals: Orders and regulations published in recent extraordinary gazettes to facilitate the import and taxation of genuine and semi-genuine gemstones were sanctioned. • Taxation Changes: • Value Added Tax (VAT) calculation on imported gemstones will now be based on their weight, a shift approved under the VAT Act. • New national sub-division customs codes were introduced via a Revenue Security Order, enabling the weight-based VAT application. • These new customs codes will also be used in relation to continued exemptions from Ports and Airport Development Taxes (PADT). • Impact: These steps are expected to streamline gemstone imports, simplify the taxation process, and reinforce Sri Lanka’s standing as a key player in the global gem market. • Source: The proposal was presented by President Anura Kumara Dissanayake in his capacity as Finance Minister.
📰 Colombo Port City Act Amendments Approved
• The Cabinet of Ministers has approved the publication of the amended Colombo Port City Economic Commission Act No. 11 of 2021 draft bill. • This approval relates to publishing the draft in the government gazette. • The clearance paves the way for the amended bill to be officially presented to Parliament for further proceedings.
Govt Weighs Curbs on Rice Imports to Boost Paddy Production 🌾
• The Government is considering stricter limits on rice imports and establishing a more formalised system for purchasing domestic paddy production. • The initiative aims to raise paddy output, stabilise prices, and strengthen protection for farmers. • Key policy discussions involved: • Maintaining a fixed purchasing price for paddy to prevent unfair practices. • Reviewing fertiliser subsidy prices against global trends. • The need for upgrading storage and drying facilities. • Officials were directed to provide district-level cost-of-production data to finalise new guaranteed price policies. • The administration plans to support all farmers through consistent policies, addressing a historical lack of mechanisms for other crops compared to paddy. • Urgent requirements were noted for state agencies, including filling key vacancies and addressing shortages of vehicles and equipment.
📈 SL-Luxembourg DTA Amendment Approved by Cabinet
• The Cabinet of Ministers approved the signing of a protocol to amend the existing Double Taxation Agreement (DTA) with Luxembourg. • The primary goal of the amendment is to ensure full compliance with the minimum standards of the G20–OECD Base Erosion and Profit Shifting (BEPS) Project. • Both Sri Lanka and Luxembourg are members of the BEPS Inclusive Framework, necessitating these revisions to the original 2013 DTA. • The proposal, submitted by the President as Finance Minister, allows the countries to proceed with signing the cleared amended protocol in due course. 🇱🇰🤝🇱🇺
BOI Import/Export Facilitation Shifts to Sri Lanka Customs 📈
• Sri Lanka Customs (SLC) is set to take over the import/export facilitation processes for Board of Investment (BOI) firms via a pilot project starting May 2026. • The move follows an MOU between BOI and SLC, with the 3-6 month pilot project scheduled to commence at the Katunayake Free Trade Zone (KFTZ). • Rationale: This is part of the Government’s commitment under the IMF's revenue-based fiscal consolidation framework, aiming to curb significant revenue leakage. • Leakage stems from extensive tax concessions and reported misuse of import/export facilities by BOI firms (e.g., illegal local sales). • BOI corporate tax exemptions were reported to have caused a loss of Rs. 23.94 Billion in corporate taxes to the Government in 2022. • Concerns: The change comes after the recent abolition of SVAT, causing unease among the business community. • Investors have expressed reservations, citing concerns about potential supply chain disruptions and the perceived rampant corruption/control focus within Customs. • While SLC has launched initiatives like the Authorised Economic Operator (AEO) Program to enhance facilitation, business confidence remains a factor.
FCCISL Unveils 5-Point Strategy for Economic Recovery & B-READY 2026 📈
• The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) presented five strategic Budget proposals for 2026, aimed at accelerating economic recovery and preparing Sri Lanka for the World Bank's Business Ready (B-READY) Index 2026. • The plan, based on the PwC–FCCISL Business Resurgence Study, focuses on modernising institutions and strengthening the private sector to transform the business environment. • Key Proposals: • Public Service Transformation Fund: Decisive national shift towards streamlined, automated, and performance-driven public services through process re-engineering and digital integration to reduce bureaucratic barriers. • Strengthened SME and Business Resurgence Mechanism: Integrated, district-level support for SMEs to access fast-tracked approvals, digital services, and dispute resolution, restoring 'real economy' momentum. • GovData-SL: Creation of a unified national digital data platform for transparent, evidence-based policymaking, tracking regulatory performance, and verifiable B-READY reporting. • National Business Reform and Facilitation Council (NBRFC): Proposed under the Finance Ministry to coordinate reforms, harmonise regulations, and accelerate cross-ministerial decisions. • District-Level Entrepreneurship Program: National model to strengthen regional competitiveness, support local SMEs, and facilitate investment through integrated, digitalised district administration. • FCCISL is calling for broad national and international partnership to implement the reforms, enhance predictability, and reposition Sri Lanka as an investment-ready economy.
📈 THASL Urges Stronger Global Branding & Policy Reforms for Tourism Sector
The Hotels Association of Sri Lanka (THASL) outgoing President M. Shanthikumar called for immediate policy changes to safeguard the sector’s future, highlighting the formal hotel industry's crucial economic contribution: • Sector Impact: • The formal hotel sector is the largest private-sector contributor to tourism development, revenue, and employment. • Hotels employ over 70% of the nation’s tourism workforce. • Total investments by member hotels exceed US$ 15 Billion over the past 60 years. • The sector generates the highest tax and levy income to the Government from the private sector. • Outlook & Key Demands: • Tourism is confidently forecasted to surpass its all-time record arrivals by the end of 2025. • Global Promotion: An urgent call was made for a strong global destination-marketing campaign to compete and ensure high foreign exchange earnings, warning against mere volume growth. • Diversification: Faster development of the MICE segment is needed to absorb Colombo's room inventory and target a 25% contribution to overall arrivals. • Policy & Regulation: THASL urged for robust regulatory frameworks covering licensing, taxation, foreign exchange compliance, and the registration of all accommodation units. • Long-term Sustainability: Shanthikumar pressed for formally designating tourism as a 'service export' and encouraging foreign investment through investor-friendly policies.
📈 Sri Lanka Greenlights Digital TV Shift: New Analogue Licences Halted
• Major Policy Step: Cabinet has approved the immediate halt on issuing new terrestrial analogue television licences, accelerating the country's long-delayed transition to digital broadcasting. • Rationale: The current analogue system, used by 24 channels (including 5 State-owned), has reached its maximum spectrum capacity, making further expansion impractical. • Digital Project: The Mass Media Ministry initiated the "Digital Non-territorial Television Broadcasting Project," aiming to establish a unified digital terrestrial platform to replace 46 existing analogue systems. • Timeline & Support: Full project implementation, supported by an agreement with Japan, is expected by 2029. The analogue switch-off is planned for two years after the project's completion. • Regulatory: Frequency allocation responsibilities have been transferred to the Telecommunications Regulatory Commission of Sri Lanka (TRCSL). • Public Impact: No new fees will be imposed on the public for the transition, though viewers may need to purchase compatible devices. The digital shift will also free up valuable frequency spectrum for new channel opportunities.
🚨 SEC Issues Urgent Scam Alert: Blue Ocean Securities Unlicensed!
The Securities and Exchange Commission (SEC) of Sri Lanka has issued an urgent warning regarding Blue Ocean Securities Ltd: • The company is NOT licensed by the SEC and has no authority to trade in securities in Sri Lanka on behalf of investors. • Its Chief Analyst and assistant are also not registered investment advisors. • The entity is also not licensed or authorized by the UK Financial Conduct Authority (FCA). • Investor Alert: Strongly advised NOT to engage in any transactions with the company, deposit money, or join its associated WhatsApp/communication channels. • Action: Regulatory measures are currently being taken by the SEC and other law enforcement authorities. • Key Reminder: Investors must only deal with licensed stockbrokers and open a CDS account before engaging in any securities transactions. Check the SEC or CSE websites for the list of licensed brokers.
Treasury Tightens SOE Spending & CSR Rules from 2026 📈
The Treasury has introduced a revised framework (Circular No. 01/2025), effective 1 January 2026, to strengthen financial discipline and transparency in State-Owned Enterprises (SOEs) regarding non-core expenditure. • Spending Cap: Annual expenditure on sponsorships, donations, CSR, and indirect promotional activities is strictly capped at 1% of the SOE’s actual recurrent expenditure from the previous financial year. • Funding Prohibition: Treasury budgetary provisions are strictly prohibited from being used for any such spending. • Financial Contribution: SOEs must remit a minimum of 30% of profit after tax annually to the Consolidated Fund and are encouraged to declare interim dividends based on quarterly performance. • Strategic Alignment: Boards must ensure all expenditures are non-political, non-personal, justified, and fully aligned with the Government's broader national development agenda. • Governance & Reporting: New mandatory requirements include submitting quarterly expenditure summaries and maintaining a dedicated internal register for audit purposes.
⚖️ SL Judiciary: Historic Digital Transformation Underway
• The Supreme Court of Sri Lanka has introduced the first-ever use of a Digital Signature in the country's Judiciary for the President’s Counsel Oath Ceremony. • This marks a historic step in modernizing judicial operations, building on the already-launched web-based Case Management System (CMS). • Immediate Impact: The digital signature process will be used for the oath ceremonies of 532 newly enrolled Attorneys-at-Law, commencing 21 November 2025. • Future Rollout: The crucial e-Filing system will be initiated in a phased manner starting in 2026, allowing Attorneys-at-Law to file applications electronically. This system is planned to expand progressively to courts island-wide. • The court is committed to enhancing transparency, accessibility, convenience, and efficiency across the Justice system.
📝 SL Parliament Reviews Draft Bill to Regulate Microfinance Sector
• Parliamentary committees, including the Sectoral Oversight Committee on Economic Development and the Women Parliamentarians’ Caucus, reviewed the draft Bill to establish the Microfinance and Credit Regulatory Authority last week (Nov 20). • Primary Objective: Create a formal Authority to oversee money-lending and microfinance activities, strengthen customer protection, and repeal the existing Microfinance Act of 2016. • The updated draft incorporates amendments ordered by the Supreme Court and other policy revisions, with the Bill now expected to be presented to Parliament. • Key Committee Concern: The proposed Board of Directors lacks representation for microfinance customers, who are directly affected by the regulatory framework. • Members stressed the disproportionate debt burden on women and proposed adding a representative from the National Commission on Women or a relevant ministry to the Board. • Committees emphasised that the legislation's core purpose must be to prevent severe indebtedness and community crises through firm regulatory oversight. • Officials from CBSL and the Treasury were instructed to incorporate these necessary amendments prior to the Bill being tabled.
🌾 Policy Reset: Lanka Pushes Shift from Input Subsidies to Output Incentives
• Core Reform: A significant shift is proposed in agricultural policy from providing costly input subsidies (like cheap fertiliser) to a digital Output-Based Aid (OBA) system, which rewards verified production results. • Current Issue: Input subsidies breed farmer dependency, distort markets, and create a "break-even trap," causing paddy farmers to settle for lower yields and inefficient practices. This also results in significant leakages of public funds. • Proposed Solution: A National ICT Platform utilizing QR codes and IoT-enabled digital scales will track paddy production sales to buyers. • Farmer Incentive: Farmers would receive a direct cash payment, e.g., Rs. 10 per kg sold. This is approximately double the support compared to the estimated Rs. 5/kg value of the current typical Rs. 10,000/acre fertiliser subsidy, directly benefiting high-producing farmers. • Triple-Win Advantage: • Farmers: Performance-based, dignified earnings rewarding efficiency and modern methods. • Government: Real-time data on food stocks and land use for smarter policy and import decisions. • Economy: Taxpayer money is released only upon actual food production, reducing corruption and fiscal leakage. • Outlook: The system aims to treat farming as a business, making it more profitable for productive cultivators and strengthening national food security.
🚨 New Cyber Scam Alert: 'Pig Butchering' Targets Sri Lankans
• Scammers recently solicited Sri Lankans for a small investment of Rs 75,000 (approx. US$ 250) via bot-related postings, promising high returns ($7,500+ monthly) from an algorithmic platform. • The scheme used AI-generated (deep-fake) videos cloning the voices and likenesses of the President, Prime Minister, and leading businesspersons to appeal to gullible investors. • While original fake videos were removed by Facebook, new versions with cloned voices of other business figures have since appeared, indicating the threat is ongoing. • This 'Pig Butchering' (Sha Zhu Pan) scam is a form of social engineering where victims are 'fattened' with false initial returns before their entire investment is stolen. • The rise in such cybercrime poses economic challenges, as it siphons off valuable foreign exchange from the country, and erodes public trust in financial institutions. • Targeted victims are often educated young professionals with a "blind faith in AI" and a desire for quick wealth. Citizens must be proactive in verifying investment opportunities to avoid becoming a victim.
💊 SL Health Ministry Reinstates & Expands Medicine Price Controls
• Health Minister Dr. Nalinda Jayatissa announced the successful reintroduction of price controls for 350 essential medicines this week, utilizing the National Medicines Regulatory Authority (NMRA) powers. • The Ministry is now considering expanding the regulatory framework to cover an additional 200 varieties of medicines. • Significant price reductions have been implemented across categories including cancer, diabetes, hypertension, and paediatric illnesses: • Cancer drug Paclitaxel (100mg/vial) reduced from approximately Rs. 42,000 to Rs. 26,332. • Nimodipine IV Infusion (for paralysis patients) reduced from Rs. 6,348 to Rs. 4,100. • The move aims to reverse the impact of excessive charges by private pharmacies and hospitals following a temporary halt in controls in December 2023. • The State Pharmaceuticals Manufacturing Corporation (SPMC) also introduced new locally manufactured medicines this year to boost affordable supply, including Celecoxib 200 mg (min. Rs. 17.60) and Sitagliptin 100 mg (cap Rs. 32).
Softlogic Trading Suspension Deferred by SEC Until End-2025 📈
• The Securities and Exchange Commission (SEC) has postponed the suspension of trading in Softlogic Holdings PLC shares until 31 December 2025. • This ruling defers the scheduled suspension, which was initially due on 1 December, allowing the shares to continue trading on the Colombo Stock Exchange through next year. • The regulatory action stems from independent auditors flagging going-concern issues in the company's reports for the FY ended March 2022 and March 2023. • Financials (6 months to 30 Sept 2025): • Consolidated Loss: Rs. 3.1 Billion, showing a 48% contraction from the Rs. 6 Billion loss reported a year ago. • The group reported a Net Liability per share of Rs. 44.78 at end September 2025. • Total Assets were Rs. 196.2 Billion, with Revenue Reserves at a negative Rs. 87 Billion. • Total Interest-Bearing Borrowings stood at Rs. 57 Billion (Current portion: Rs. 15 Billion).
🇮🇳-🇱🇰 Financial Sector Cooperation: India's FATF Delegation Completes Second Phase Training 📈
• A delegation from India’s Financial Action Task Force (FATF) Cell, including experts from FIU, RBI, SEBI, and IRDAI, visited Sri Lanka from November 12–14, 2025, for the second phase of a capacity-building program. • The training targeted officials from the Central Bank of Sri Lanka (CBSL), Securities and Exchange Commission, Insurance Regulatory Commission, and representatives from private financial institutions. • Key sessions focused on strengthening financial sector supervision, regulatory coordination, supervisory practices, and emerging financial system challenges through experience-sharing and case studies. • The delegation also met CBSL leadership to discuss ongoing cooperation, including the regulatory framework for Virtual Asset Service Providers (VASPs) and India's insights on digital payments. • This visit follows earlier engagements in October, with the overall goal being to enhance bilateral collaboration, improve regulatory preparedness, and ensure alignment with global standards.
🚨 SEC Sounds Alarm Over Unauthorized Investment Tips on Social Media
• The Securities and Exchange Commission of Sri Lanka (SEC) has issued a strong warning to social media users (including platforms like X) regarding the sharing or following of unlicensed investment recommendations. • Legal Mandate: Only Registered Investment Advisors or bodies officially licensed by the SEC are permitted to issue investment-related guidance. • Strict Penalties: Individuals who violate Part 5 of the SEC Act risk prosecution before the High Court. • Minimum Fine: Penalties include a fine of at least Rs. 10 million, imprisonment of up to ten years, or both. • Investor Protection: This action is part of the SEC’s ongoing effort to protect the interests of investors and maintain market integrity.
🚨 CBSL Naming: 23 Prohibited Pyramid Schemes Alert
• The Central Bank of Sri Lanka (CBSL) has declared 23 entities/apps as prohibited pyramid schemes following investigations under the Banking Act. • Confirmation & Naming: The CBSL confirmed that SGO/sgomine.com was operating a pyramid scheme and identified a further 22 entities running similar operations. • Key Examples Listed: OnmaxDT, MTFE App and its associated groups, Tiens Lanka Health Care Ltd., Best Life International Ltd., Sport Chain app, Fastwin Ltd., Fruugo Online App, and Qnet/Questnet. • Warning: CBSL strongly cautioned the public to exercise due diligence and avoid engaging with these entities, citing risks of substantial financial losses and broader economic instability.
SLAASMB Flags Persistent Gaps in Financial Reporting Quality 📉
The Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) 2024 Regulatory Activity Report highlights ongoing weaknesses in financial reporting across the economy. • Nearly half of the reports reviewed require improvement: Of 388 financial statements from 381 economically significant enterprises (SBEs), 49% were not fully compliant with Sri Lanka Accounting Standards (LKAS). • Compliance issues spanned several core areas: • Incomplete risk disclosures, including inadequate maturity analyses of financial liabilities. • Weak impairment assessments (SLFRS 9/LKAS 36) and insufficient details on valuation techniques and fair value hierarchy. • Missing or insufficient disclosures on tax reconciliations, related-party transactions, and depreciation policies. • The review coverage increased sharply to 388 statements in 2024 (from 261 in 2023), with approximately 62% from regulated entities. • Audit oversight noted: The SLAASMB inspected 22 audits (up from 16), finding that 3 required improvements due to deficiencies in areas like audit planning, risk assessment, and evidence gathering for revenue/inventory. • Submission trend: Filing rates for annual reports are recovering, with 1,517 SBEs submitting statements in 2024 (vs. 1,194 in 2020). The regulator stressed that these recurring disclosure and measurement omissions directly affect the reliability of financial statements.
📈 Cabinet Boosts Green Gram Procurement: Rs. 764M Allocated
• Cabinet has approved an allocation of Rs. 764 million to expand the Government's green gram procurement program. • The initiative is designed to purchase the harvest in competition with the private sector to ensure farmers receive a fair price. This follows reports of middlemen purchasing at low rates (e.g., Rs. 450/kg) in districts like Hambantota. • Under the 2025 Green Gram Program, cultivation covered approximately 16,500 hectares during the Yala and intermediate seasons. • The expected yield is about 14,600 tons, with roughly 12,000 tons anticipated to reach the local market. • The National Food Promotion Board is implementing direct purchases from farmers, acting on the advice of the Ministry of Agriculture.
🇱🇰 Motor Traffic Fee Update: New Levies for Foreign Driving Licence Holders 📈
• The Transport Ministry has announced revisions to the Motor Traffic (Driving Licence Levy) Regulations of 2022, effective immediately via Gazette No. 2463/04. • Key Charges for Obtaining a Local Licence: • Sri Lankan citizens holding a foreign licence: Rs. 30,000. • Non-citizens converting an overseas licence to a Sri Lankan one: Rs. 60,000. • A new series of additional charges have been introduced for non-citizens and short-term visitors for services like renewals, duplicates, and temporary licences, ranging from Rs. 15,000 to Rs. 45,000, depending on the type and duration. • The Ministry states the adjustments reflect current policy requirements and aim for improved revenue administration.
🐔 Level Playing Field Needed for Poultry Exports: Maize Policy Reforms Demanded
• The technologically advanced poultry industry is stagnant, operating below capacity and unable to enter export markets due to high production costs. • Core Issue: Maize, which accounts for over 50% of broiler feed, is uncompetitive. Domestic maize averages ~Rs. 150/kg, far above imported options (e.g., India landed at ~Rs. 96/kg). • Policy Barrier 1 (SCL): Imported maize is subject to a Special Commodity Levy (SCL) of Rs. 25/kg, a non-recoverable direct cost that artificially inflates prices. • Policy Barrier 2 (Quota): Import quotas create artificial shortages, elevate market prices, and block feed mills from securing globally competitive rates. • Industry Request: Remove the SCL on maize and bring both imported and local maize under the VAT system—a neutral, creditable tax already applied to sectors like coconut oil and fabric to eliminate market distortions. • Goal: Relaxing quotas and removing SCL is essential to lower production costs, stabilise the market, allow full capacity operation, and enable the sector to pursue foreign exchange earnings as a regional exporter. • Consumer Benefit: Reforms would also help reduce consumer prices for chicken and eggs, key affordable protein sources.
SL's PPP & SOE Reforms: Ambitious, but Credibility Hinges on Execution 📈
Deloitte partners affirm Sri Lanka's new draft PPP law and SOE restructuring (led by CEB unbundling) are ambitious reforms, crucial for drawing private capital into infrastructure. • Investor Requirements: To attract global funds (pension, sovereign, Middle Eastern capital), projects must be structured at scale, typically requiring a minimum US$ 50-100 Mn ticket size per project. • Core Concern: Exchange rate risk remains a central worry for investors, following the sharp rupee depreciation which eroded dollar returns on long-term assets. Currency stability is key. • Credibility Test: Investor confidence hinges on the quality and execution of the first wave of PPPs—specifically, clear feasibility studies, proper risk allocation, and defined deliverables. • SOE Benchmark: India's reforms show the fiscal upside: ~300 listed SOEs now rival private sector profits and require mandatory dividend payouts of at least 2% of net worth annually. CEB's unbundling is SL's most ambitious SOE initiative. • Priority Sectors: Sectors best suited for PPPs include energy transition, ports, logistics, and user-pay sectors (e.g., renewables, toll roads). • Foundation: Stable macroeconomic conditions, regulatory clarity, and policy consistency are critical for long-term private capital commitment. 🇱🇰
🛡️ CUBA Warns Against Rushing Tariff Dismantling
• The Ceylon United Business Alliance (CUBA) urges Sri Lanka not to dismantle tariffs or para-tariffs under the new Economic Stabilisation Act until the nation's foreign exchange (forex) reserves secure a sustainable and safe threshold. • CUBA argues that unilateral liberalisation amid severe forex pressures risks inviting a surge of cheap imports, weakening the rupee, and undermining domestic industries. • The current tariff policy is highlighted as "economically indefensible" due to extreme unevenness: Politically connected sectors (hardware, building materials) face very high para-tariffs (40-75%). • In contrast, a major domestic consumption sector, clothing (worth over US$ 2 Bn annually), remains severely under-protected with para-tariffs of only 5-10%. This disparity must be corrected immediately. • Policymakers are urged to introduce WTO-compliant non-tariff barriers, including quality standards and safeguard clauses, ensuring protection while linking tariff liberalisation directly to a clear foreign reserve threshold.
🎬 Cabinet Greenlights New Film Council: Modernising Sri Lanka's Cinema Sector
• The Cabinet of Ministers has approved a draft bill to establish the Sri Lanka National Film Council (SLNFC), repealing the nearly five-decade-old Sri Lanka National Film Corporation (NFC) Act No. 47 of 1971. • This institutional overhaul aims to modernise cinema regulation and promote film culture, updating the framework to reflect significant changes in technology, society, politics, and the economy. • The new Council is mandated to strategically oversee and regulate the film industry, ensuring both the safeguarding of cinematic heritage and the fostering of innovation in production, distribution, and exhibition. • This reform is part of broader efforts to modernise the arts and cultural sectors, creating an enabling environment for local filmmakers.
🔬 Cabinet OKs 5-Year Vidatha Plan (2026–2030) to Boost Rural Technology & Innovation
• The Cabinet of Ministers approved a comprehensive five-year strategic plan (2026–2030) for the Vidatha program. • Goal: To empower rural communities across the country by leveraging scientific research and technology innovation, operating under the core concept of "Technology for Villages." • The plan aims to reinforce the Vidatha initiative, which currently runs 315 Vidatha Centres island-wide. • Key Strategy: Vidatha Resource Centres will be transformed into microservices, collaborating with bodies like the National Enterprise Development Authority (NEDA) and the Industrial Development Board (IDB). • Implementation: A significant step involves deploying a dedicated science graduate to each of the 315 centres to strengthen local technology access and support rural innovation, enhancing scientific literacy in village communities.
🏏 Pakistan Fined for Slow Over-Rate in 1st ODI vs. Sri Lanka
• The Pakistan cricket team has been fined 20% of their match fee following the first One Day International (ODI) against Sri Lanka in Rawalpindi. • The penalty was imposed by Match Referee Ali Naqvi for maintaining a slow over-rate. • Shaheen Shah Afridi’s side was ruled to be four overs short of the target after all time allowances. • In accordance with ICC rules (Article 2.22), players are fined 5% of their match fee for every over their side fails to bowl in the allotted time. • Captain Shaheen pleaded guilty to the offence and accepted the sanction, negating the need for a formal hearing.
📈 Treasury Debunks SME Funding Critics; Confident in Higher 2026 Revenue
• The Treasury Secretary affirmed that Government-led initiatives for SMEs are progressing faster than perceived. • Credit Guarantee Scheme: The National Credit Guarantee Institution (NCGI), launched in May 2025, has already issued Rs. 4.2 Bn in credit assurances to SMEs within five months. This figure is four times higher than recent public perception. • SME Allocation: Over 90% of the Rs. 20 Bn allocated for SME support in 2025 has been disbursed. • Banking Sector Support: Private sector banks are strongly engaged, with several major commercial banks disbursing hundreds of billions in SME financing (e.g., one major bank portfolio exceeds Rs. 300 Bn). • 2026 Revenue Outlook: Officials anticipate a significant increase in 2026 revenue, based on the soaring number of Letters of Credit (LCs) opened for vehicle imports. • Reforms: Revenue administration and digital modernization programs are underway, with confidence that targets can be met—and possibly exceeded—due to momentum and cultural transformation in the public sector.
📈 Cabinet Clears Drafting of Key Investment Protection Bill
The Cabinet of Ministers has approved instructing the Legal Draftsman to draft a new Investment Protection Bill (also referred to as the Investment Security Bill). This move follows a proposal introduced in the 2025 Budget. • Core Objective: The proposed law seeks to explicitly prevent the arbitrary nationalisation of private enterprises and assets, aiming to ensure long-term policy stability for both domestic and foreign investors. • New Mechanism: It mandates the establishment of an Investment Protection Board to provide a structured and transparent mechanism for resolving investment-related disputes. • National Context: The Government views the legislation as a critical step to enhance policy predictability, strengthen investor confidence, improve the country's ease of doing business ranking, and attract sustainable Foreign Direct Investment (FDI). • The proposal for the new Act was submitted by President Anura Kumara Dissanayake in his capacity as the Finance, Planning and Economic Development Minister.
🇱🇰 Digital Economy Progress Review: President Pushes for SLUDI & 500 New Towers 📈
• President Anura Kumara Dissanayake chaired the 2025 progress review for the Ministry of Digital Economy, focusing on projects under TRCSL, DRP, and GovTech. • The President emphasized establishing a solid foundation for government digital investments, a key component of the proposed 2026 Budget, while also addressing policy and administrative delays. • Digital Infrastructure & Investment: Measures were discussed to create a more conducive environment for private sector investors in digital infrastructure, including island-wide telecom tower construction. • Target Acceleration: President instructed expediting the "Communication to the Village" initiative, setting a target of 500 new telecom towers to be installed within three years. • Identity & Governance: Instructions were given to DRP officials to immediately resolve delays in issuing National Identity Cards (NICs). High priority remains on expediting the Sri Lanka Unique Digital Identity (SLUDI) project. • Further steps include establishing a new Digital Economy Authority and developing necessary human resources for a robust ICT/BPM enabled digital economy.
JKCG Secures Release of Detained BYD EVs via Court Agreement 🚗
John Keells CG Auto (JKCG) has provided an update on the detention of BYD electric vehicles by Sri Lanka Customs, following proceedings in the Court of Appeal: • Positive Outcome: Sri Lanka Customs agreed in Court (Nov 11, 2025) to release the currently detained 631 electric vehicles, which include BYD ATTO 1 and ATTO 2 models. • Release Terms: The vehicles will be released under agreed guarantee terms (Corporate and Bank Guarantees offered by JKCG) to cover the difference in alleged additional duties due. • Legal Context: This resolution follows two further Writ Applications filed by JKCG (Sept/Oct 2025) challenging the continued detention of the vehicles. • Ongoing Technical Dispute: JKCG reiterates that the globally accepted norm is to rely on the Manufacturer’s Certificate for vehicle clearance. The dispute centers on verifying the motor power of the electric vehicles. • Verification Status: JKCG offered to provide technical equipment and made available a Vehicle Diagnostics Service (VDS) on Nov 6, 2025, but Customs did not conduct the testing on that date. Customs will notify the Court of the next steps regarding the testing. • JKCG is committed to fulfilling its obligations to customers following the release.
📈 WmB Coalition Drives Systemic Reform for Women-led MSMEs 🇱🇰
• The Women Mean Business (WmB) Coalition, convened by Chrysalis and supported by Co-Impact, held its 5th meeting, gathering over 80 stakeholders (Govt., finance, UN, entrepreneurs) to accelerate gender-transformative reforms in Sri Lanka's MSME sector. • The Coalition drives change across six key thematic areas, including policy reform, access to finance & markets, climate finance, and gender-based violence (GBV) mitigation. Chrysalis CEO stressed that Women-owned MSMEs are vital for inclusive growth. • Ministry of Industry announced a plan to deploy 600 trained relationship officers. These officers will guide high-potential SMEs for about two years, coordinating with agencies to improve their creditworthiness and sustainability. • UNDP committed to using evidence-based analysis to enhance gender-responsive policies, improving enterprise access to financing. • The meeting highlighted the need for increased support in districts like Mullaitivu and Kilinochchi, concluding with renewed commitments for joint advocacy and coordinated action.
Sri Lanka: 2024 Auditor General's Report Submitted to Parliament 📜
• The Annual Report of the Auditor General for the year 2024 was officially handed over to Speaker of the House Dr. Jagath Wickramaratne by Acting Auditor General G.H.D. Dharmapala. • This submission was made in accordance with the provisions of Article 154 of the Constitution. • The report compiles audits conducted on a large number of state institutions, including Ministries, Departments, Corporations, Boards, Authorities, statutory funds, non-statutory funds, and foreign-aid projects. • A significant focus included audits of State-Owned Enterprises (SOEs), Provincial Councils, and Local Government institutions, with individual reports having been previously submitted to Parliament throughout 2024.
SL Signs Hajj 2026 Agreement; Secures Quota 🤝
• Sri Lanka formally signed the agreement for the Hajj 2026 pilgrimage on Sunday, 09 November, in Jeddah, Saudi Arabia. • The official Hajj quota allocated to Sri Lanka under the agreement is set at 3,500 pilgrims. • The agreement was signed by the Sri Lankan delegation, led by Deputy Minister of Religious and Cultural Affairs Muneer Mulaffer, and Saudi Deputy Minister of Hajj and Umrah Dr. Abdulfattah Bin Sulaiman Mashat. • Minister Mulaffer conveyed appreciation for Saudi Arabia's arrangements for Hajj 2025 and reaffirmed Sri Lanka's commitment to close collaboration for a successful Hajj 2026. • Sri Lanka’s government is also taking measures to regularise national Hajj operations, including the drafting of the Hajj Act.
📈 SAGT CEO Outlines Keys to Successful PPPs & Investor Confidence
• South Asia Gateway Terminals (SAGT) CEO Romesh David highlights four critical factors for Sri Lanka to attract credible investors into Public-Private Partnerships (PPPs): 1. Clarity of Purpose: Full alignment and consistent communication across all Government agencies (e.g., finance, investment, port authorities). 2. Speed in Decision-Making: Warns the country cannot afford multi-year delays (2-5 years) for approvals if it is to remain globally competitive. 3. Fairness in Execution: Requires strict separation of roles—Government entities should not act as regulator, owner, and competitor simultaneously. • Role Separation: Stressing the importance of structural clarity, David noted that separating the roles of regulator, owner, and operator was key to SAGT becoming a globally recognised PPP model for Port/Terminal Operations. • Replication Failure: SAGT is cited by ADB/IFC as a textbook success, yet Sri Lanka has "failed to build on that success" by replicating the model in other essential sectors. • Urgency: Future PPP success depends on maintaining policy consistency, institutional coherence, and moving projects with urgency.
Major Shift: Sri Lanka Trims SDP Tax Holidays & Boosts Transparency 📈
The Government has published the Strategic Development Projects (Amendment) Bill, 2025, overhauling the investment incentive framework: • Tax Holiday Cut: The maximum tax holiday granted under the SDP Act has been drastically reduced from 25 years to a maximum of 10 years. • Enhanced Vetting: The BOI must now refer all SDP proposals to the Finance Ministry for a mandatory ex-ante cost-benefit analysis before granting concessions. • Transparency & Compliance: New rules introduce compulsory tax filing, disclosure of project outcomes, and ex-post monitoring of performance by the BOI. • Accountability: Tax benefits can be restricted, suspended, or revoked if an SDP project fails to meet approved performance indicators, following a show-cause process. • Fiscal Reporting: The Finance Ministry is mandated to publish an annual report detailing tax expenditures for all SDPs, promoting greater fiscal transparency. • Transition: Existing tax holidays granted prior to the amendment will remain valid for their original duration, provided conditions are met. The move aims to replace a culture of "cronyism" and "privilege" with "credibility" and "predictability" to attract quality investments, according to President and Finance Minister Dissanayake.
🇱🇰 Data Protection Authority Announces Key Posts to Establish Secretariat 📢
• The Data Protection Authority (DPA) of Sri Lanka has announced new leadership positions, including the Director General, following the recent unanimous adoption of the Personal Data Protection (Amendment) Bill. • These positions are essential for setting up the DPA Secretariat, which will implement the DPA's strategy and roadmap. • Establishing the full-time Secretariat is a major step to advance the national agenda on data protection and digital trust, which is vital for the growth and innovation in the digital economy. • The move is a prerequisite to determine the enforcement dates for the Personal Data Protection Act (PDPA). • DPA is recruiting highly skilled professionals across policy, compliance, cybersecurity, and IT to directly influence PDPA implementation and define the digital regulation landscape.
📈 SEC Stresses Accountability: Directors' Liabilities & Governance Overhaul
• Event Focus: The Securities and Exchange Commission (SEC) held a special session on "Directors' Liabilities" for over 150 directors of listed companies, emphasizing that the strength of the Capital Market lies in the "integrity of Boards." • Legal Risk: Under the Companies Act, directors face an extensive spectrum of legal exposure, including 37 civil and 131 criminal liabilities. The Solvency Test (Sec 57) was highlighted as the "golden thread" of corporate law. • Core Duties: Directors must act in good faith and the best interest of the company (Sec 187), exercise prudence/diligence, and be intimately familiar with their company's Articles of Association. • Compliance & Oversight: • Effective delegation is crucial for compliance, but implementation must be robust. • Boards must monitor early warning signs of financial distress (e.g., delayed financials, frequent restatements). Mandatory delisting results in a 3-year loss of 'fit and propriety' status. • Reliance on management information is compromised by late or ambiguous Board papers. • New Regulation: Listed companies face a strict obligation to disclose ultimate beneficial owner information to the Registrar of Companies via the CSE within 30 days of the new Companies Act No. 12 of 2025 coming into operation.
🛡️ CBSL Tightens Vehicle Loan Limits to Curb Imports & Financial Risk
• The Central Bank of Sri Lanka (CBSL) has reduced maximum Loan-to-Value (LTV) ratios for vehicle financing, effective 8 November 2025, as a macro-prudential measure to manage credit growth. • The decision aims to ensure prudent lending and follows the external sector recording its first current account deficit of 2025 in September, driven by soaring vehicle imports. • Key LTV Changes: • Commercial Vehicles: Reduced to 70% (down from 80%). • Motor Cars, Vans, & SUVs: Reduced to 50% (down from 60%). • Financing for other vehicle types is now 50% (down from 70%); three-wheelers remain capped at 50%. • Import & Sector Impact: • Vehicle imports surged to US$ 286 Mn in September, bringing the 9-month total to US$ 1.2 Bn. • CBSL has revised the 2025 vehicle import forecast upward to US$ 1.5 Bn. • Vehicle loans currently account for over 63% of the total loan portfolio of the finance company sector. • Transitional provisions apply to vehicles imported under Letters of Credit (LCs) opened prior to the new direction date.
📈 CBSL Proposes FBA Amendments: Public Input Requested
The Central Bank of Sri Lanka (CBSL) has invited public input on draft amendments to the Finance Business Act (FBA). These changes are designed to significantly reinforce the oversight mechanisms and resolution framework within the financial sector by focusing on three main areas: • Enhancing the regulation and supervision framework for licensed Finance Companies (FCs). • Strengthening the investigation and prosecution mechanisms for unauthorised finance businesses. • Streamlining the resolution and winding-up process for non-viable FCs. All stakeholders, industry participants, and the general public are invited to submit their views, suggestions, and comments by 30 November 2025. Feedback can be submitted via post, fax (011 2477738), or email to [email protected] (Subject: Views/Suggestions/Comments on the draft amendments to the Finance Business Act).
🇱🇰 JAAF Welcomes 2026 Budget Focus, Urges Policy Clarity for Exports 📈
• The Joint Apparel Association Forum (JAAF) welcomed the 2026 Budget's clear intent towards export-led growth, investment facilitation, and continued macroeconomic stability. • Commended positive steps like renewed focus on digitalisation, trade facilitation, enhanced capital allowances, and administrative reforms (Inland Revenue reform, RAMIS 3.0, E-invoicing). • JAAF stressed that policy execution, consistency, and clarity in implementation are crucial to translate commitments into tangible outcomes and drive confidence in the highly competitive global environment. • Key enablers urged for continued export growth include: ensuring stable energy costs, facilitating renewable adoption, enhancing logistics competitiveness, and aligning policy with sustainability goals/preferential market access requirements. • The industry reiterated its readiness to collaborate on a unified national export strategy supporting industries and the workforce.
Correction on NPC Constitutional Mandate (PPP Framework)
• A correction has been issued regarding a previous article on legal complexities within Sri Lanka's Public-Private Partnership (PPP) framework. • The error pertains to the constitutional reference for the powers vested in the National Procurement Commission (NPC). • The article incorrectly cited Article 161 of the Constitution. • Key Correction: The NPC's powers are correctly derived from Article 156 of the Constitution.
Budget 2026: Sri Lanka Ramps Up Reforms to Attract Global FDI 📈
• The 2026 Budget, presented by President/Finance Minister A.K. Disanayake, positioned Sri Lanka as an honest, "friendly country for investors," viewing them as an asset. • Core Goal: Significantly increase Foreign Direct Investment (FDI) through a transparent, rules-based mechanism. The medium-term economic growth vision is 7% (up from current 4-5%). • New Incentives/Policies: • Introduced a Residence visa system for foreign investors meeting minimum thresholds in priority sectors/eligible projects. • Amendments proposed to the Strategic Development Projects Act and Colombo Port City Commission Act to streamline FDI and enhance incentive transparency/consistency. • Regulatory Framework Strengthening: The government is replacing cronyism with credibility and predictability, and is fast-tracking key legislation: • Investment Protection Act (to be passed in early 2026). • Transparent legal framework for the Public-Private Partnership (PPP) Act (for approval in early 2026). • Investment Opportunities are highlighted across various sectors, including exports, digital & IT infrastructure, tourism, port & aviation, blue economy, energy, and agriculture.
📈 Industry Data Centralisation: NIIS Launched
• The Ministry of Industry and Entrepreneurship Development has launched the National Industry Information System (NIIS) in Colombo. • The NIIS is a new digital platform designed to centralise and manage critical information concerning Sri Lanka's economic and industrial activities. • Its key function is to boost data integration for better sector oversight.
📈 Sri Lanka Targets PPP Act and Key Investment Laws by Q1 2026
The Government is fast-tracking legal reforms to create a coherent framework for attracting private investment into public infrastructure, aiming to address procurement overlaps and boost investor confidence. • PPP Act Enactment: • The National Agency for Public–Private Partnership (NAPPP) aims to get the final draft of the PPP Act approved by Cabinet this month (Nov 2025) and enacted by January 2026. • This will be followed by new comprehensive PPP procurement guidelines. • Evaluation Tool: • A new Screening and Scoring Tool to professionally evaluate PPP projects is currently being developed and is expected to be ready by the end of Q1 next year (March 2026). • Investor Protection: • In parallel, a new Investment Protection Act is being drafted. The Government's goal is to have this legislation in place within Q1 next year to improve the investor climate. • Expert Caution: • A key warning was raised by experts at the forum, noting that the effectiveness of these multiple reforms could be undermined by existing institutional fragmentation and overlapping legal mandates if not urgently resolved.
📣 New Ethics Guidelines Proposed for Media Reporting on Women & Girls
• Verité Media and Politics (via Ethics Eye platform), in partnership with the French Embassy, has submitted recommendations to Mass Media Deputy Minister Kaushalya Ariyarathne. • The proposal outlines a national media guideline for ethical and survivor-centred reporting on women and girl-children. • Justification is based on Ethics Eye’s nearly decade-long monitoring, which documented problematic Sinhala media coverage that normalises violence and reinforces harmful stereotypes. • Key immediate actions recommended: • Draft and adopt a survivor-centred national media guideline and encourage adoption by all mainstream and digital outlets. • Allocate funds in the 2026 Budget for national training and capacity building on the new guidelines. • This effort supports the Government’s mandate to reform media ethics and align with international best practices.
🚨 KDK Brand Protection: Panasonic Secures Enjoining Order Against Counterfeiting
• Panasonic Ecology Systems Co., Ltd., the global leader in indoor air quality (IAQ) solutions, successfully secured an Enjoining Order from the Commercial High Court of Colombo. • The company instituted civil proceedings under the Intellectual Property Act No. 36 of 2003 against Zam Zam Electricals and Home Needs, a retailer in Kurunegala. • Allegation: The defendant was engaged in the sale of counterfeit ceiling fans unlawfully bearing Panasonic’s registered trademarks, specifically the well-known KDK name and logo. • Panasonic contended that the unauthorised use of identical or deceptively similar marks misleads consumers and capitalises unfairly on the goodwill associated with the brand, causing significant harm to reputation. • The High Court granted the Enjoining Order, which immediately restrains the defendant and its agents from producing, importing, marketing, selling, or otherwise dealing in any goods bearing names or marks confusingly similar to Panasonic's registered trademarks.
📈 Labour Unions Table Policy-Focused 2026 Budget Reforms
A consortium of 13 independent labour unions affiliated with the NLAC has jointly submitted policy-driven proposals for the 2026 Budget, marking a significant break from traditional demands for salary increments. • The focus is on labour policy reform, institutional accountability, and workers' rights, not financial benefits or handouts. • Governance & SOEs: • Demand forensic audits into major State-Owned Enterprises (SOEs) (e.g., State banks, CEB, CPC, SLT) and favour restructuring over privatisation to maintain essential public services and public ownership. • Insist on retaining the management of the EPF with the Central Bank of Sri Lanka (CBSL) to ensure worker trust and fund security. • Labour Protection & Social Security: • Call for the long-delayed Workers' Charter to be implemented and for labour law reforms to uniformly strengthen worker protections across all regions (e.g., no separate laws for Colombo Port City). • Propose a new social security scheme for gig workers (app-based/task-based), funded by a nominal Rs. 1 levy per transaction. • Recommend a contributory unemployment benefit plan for the private sector and ratification of key ILO Conventions on harassment. • Estate & Tax Reforms: • Highlight the need to improve estate worker welfare by settling unpaid provident fund dues, raising wages, upgrading housing, and granting 10 perches of land per worker. • Advocate for replacing indirect taxes on essential goods with progressive taxation on high incomes.
SL's PPP Framework faces 'Fruit Salad' Legal Confusion ⚠️
Expert warning highlights a critical need to streamline Sri Lanka's Public-Private Partnership (PPP) and procurement laws to avoid confusing investors and deterring investment 📈. • The Overlap: National Procurement Commission (NPC) Member Dr. Asanga Gunawansa flags a potential 'fruit salad situation' with four parallel entities claiming overlapping oversight: Finance Ministry (under PFM Act), Public Investment Committee (PIC), National Agency for PPP (NAPPP), and the revived NPC. • Legal Conflict: The recently enacted Public Finance Management (PFM) Act (Sections 40–45 deal with PPPs) stipulates that it will supersede other laws in the event of any conflict on the same subject. • NPC Powers: NPC guidelines now possess a Constitutional mandate under the 21st Amendment, giving them the "teeth of legislation," a major shift from previous practices. • Urgent Alignment: Stressed that mandates must be aligned now, before the forthcoming PPP Act is enacted, to prevent the confusion from multiplying, noting that relying on judicial review is impractical. • Translation Risk: Cautioned that legal misinterpretation is also risked by translation flaws, as the Sinhala version of the legislation legally prevails over the original English draft.
📈 Govt. Allocates Rs. 1 Bn for R&D Commercialisation Approach
The Cabinet has approved the 'Research and Development Commercialisation Approach' framework, allocating Rs. 1 Billion (Rs. 1 Bn) from Budget 2025 to fund and expedite high-impact projects. • Objective: To link research and innovation with national economic goals, converting research-based projects into viable commercial ventures. • Oversight: A dedicated R&D Commercialisation Unit is established under the Presidential Secretariat to evaluate projects based on technical, administrative, economic, social, and environmental impact. • Demand: The Unit has already received applications worth Rs. 2.2 Billion from local researchers and entrepreneurs. • Funding Structure: Selected projects are eligible for a maximum of Rs. 50 Million: • Up to Rs. 10 Mn as an initial feasibility-based grant. • The balance as a repayable loan component. • Repayment Terms: Loan must be repaid through 25% of the project’s annual net profit, following a one-year concessionary period. • Management: Disbursement and oversight will be jointly managed by the Bank of Ceylon and the Treasury's Development Finance Department.
SL Tax Loopholes Threaten Local Industries & State Revenue ⚖️
Multinational Companies (MNCs) are reportedly exploiting ambiguities and loopholes in Sri Lanka’s tax laws, creating an uneven playing field that threatens compliant domestic industries and results in substantial revenue loss for the State. • Core Issue: MNCs utilize global expertise to minimize/avoid tax payments, forcing local enterprises (which face high costs and regulatory burdens) to compete unfairly, pushing many toward closure or relocation. • Case in Point: The digital service sector (Rides & Eats) is cited. The locally incorporated entity pays full taxes (CIT), while its foreign counterpart, operating through a dependent agent, allegedly evades similar tax obligations. • Legal Stance: Sri Lanka’s IR Act and Double Tax Avoidance Agreements (DTAAs) are clear: non-resident entities operating through a Permanent Establishment (PE) or a dependent agent are liable for income tax on profits. • Evasion Attempt: Non-resident companies are reportedly attempting to register under the new VAT Amendment Act (for entities without a PE), which could be a bid to incorrectly claim exemption from income tax, despite evidence of dependent agency. • Wider Scope: The problem extends beyond "Rides" to numerous non-resident digital and service providers in sectors like tourism, hotel booking, and e-commerce. • Call to Action: Authorities must enhance capacity and consistently enforce the law to recover billions in lost revenue, ensure a fair tax regime, and protect local businesses.
⚖️ PUMA Secures Orders Against Counterfeit Trade in Colombo
• Global sportswear pioneer PUMA SE has successfully obtained four enjoining orders from the Commercial High Court of Colombo against four connected entities, including "SAFFANS," for the sale of counterfeit goods. • Legal Action: The civil litigation was initiated under the Sri Lankan Intellectual Property Act No. 36 of 2003, targeting the unlawful use of PUMA’s registered trademarks (e.g., the PUMA word mark and the leaping cat logo). • Defendants: The entities named—all noted retailers in the footwear industry—were alleged to be exploiting the global brand’s reputation by circulating inferior-quality goods under the guise of authenticity. • Court Order: Judges Amali Ranaweera and Chamath Madanayake issued orders prohibiting the defendants from producing, importing, marketing, selling, or otherwise dealing in any merchandise confusingly similar to PUMA’s registered marks. • This action reinforces the enforcement of Intellectual Property rights in the local market, crucial for global brand confidence and fair trade practices.
SL-India Forum Boosts PPP Momentum: 67 Projects Identified 🤝
• A high-level forum between the Indian High Commission and the Ceylon Chamber of Commerce (CCC) highlighted the crucial role of Public-Private Partnerships (PPPs) to bridge Sri Lanka's investment gaps. • CCC Vice Chairman stated it's timely for SL to seriously relook at PPP opportunities, noting that global capital is gradually flowing back into emerging markets due to stabilised reserves and expected declining global interest rates. • India's High Commissioner offered support, stressing that India and SL could jointly pioneer modern PPP frameworks, using India's two-decade PPP success as a template for the Global South. • The National Agency for PPP (NAPPP) CEO disclosed that 67 projects have already been identified as potential PPPs across key sectors like transport, water, and energy. • The Government is finalising long-awaited PPP legislation, supported by the Public Finance Management Act No. 44 of 2024, to introduce a transparent and efficient investment mechanism for sectors including ports, aviation, energy, and education. • Strong institutional capacity, coordination, trust, and accountability are emphasised as fundamental to ensuring the long-term success of these collaborations.
🇱🇰 One-Day NIC Service Decentralized to North Western Province
• The Department for Registration of Persons officially launched the One-Day National Identity Card (NIC) Issuance Service at its new North Western Provincial Office in Kurunegala on November 3rd. • This marks a significant step in the decentralization of services, empowering North Western Province residents to receive their NIC within just a few hours without traveling to the Colombo Head Office. • The initiative is part of organizational and technological reforms funded and supported by the Cabinet-approved Electronic National Identity Card (eNIC) Project. • Provincial offices are now operational in Galle, Nuwara Eliya, Batticaloa, and Vavuniya. The One-Day service is already successfully functioning at the Galle and Nuwara Eliya offices. • Similar offices are planned for future opening in other provinces to further strengthen fast and reliable public services.
Customs Intercepts Rs. 21M+ Kush Cannabis at BIA 🚨
• The Narcotics Control Unit (NCU) of Sri Lanka Customs arrested a 28-year-old Sri Lankan national at the Bandaranaike International Airport (BIA). • The individual was attempting to smuggle Kush Cannabis weighing 2.07kg (2,079 grams). • The total street value of the seized narcotic consignment is estimated at over Rs. 21 million. • The suspect arrived from Bangkok, Thailand via Chennai, India, with the drugs concealed in checked-in luggage. • The arrested individual and the recovered narcotics have been handed over to the Police Narcotics Bureau (PNB) for further investigation and legal proceedings. 👮
ICCSL-RKMT's Digital Tax Blueprint for Budget 2026 📈
• The ICCSL-RKMT has proposed a 'Blueprint for Smarter Revenue Mobilisation' focusing on modernization, simplicity, and building long-term trust for the upcoming 2026 Budget. • Proposal 1: Digitalisation Tax Credit • Suggests a two-year tax credit (up to 25%) for enterprises, especially SMEs, that invest in digital compliance tools like e-invoicing systems, ERPs, and cybersecurity. • Rationale: Rewards investment in accuracy, transparency, and strengthens the foundation for digital audits. • Proposal 2: Simplified Service Economy Tax Framework • Aims to formalize sectors like freelancers, consultants, and IT professionals. • Small-scale service providers (turnover < Rs. 20M) can voluntarily register and pay a 3–5% presumptive tax on gross receipts. • Encourages automatic tax withholding via e-payment platforms for nearly effortless compliance. • Proposal 3: Integrated Taxpayer Tracking • Recommends a unified digital dashboard to consolidate and provide real-time tracking of registration, filing, payment, audit, and refund status across all tax types. • Goal: Increase transparency, reduce red tape, and restore taxpayer trust. • The proposal advocates for a modern tax culture, noting that the next economic leap will come from "better taxation" rather than more taxes. ICC Paris has offered support for Sri Lanka's digitalisation efforts.
Digital Infodemic Poses Systemic Risk to Business Credibility 📈
• Algorithms have created an "Infodemic" by prioritising provocation and virality over truth and accuracy, which the World Economic Forum ranks as a systemic risk to business credibility and stability. • For communicators, this means reputation management is a permanent crisis, as algorithmically amplified lies (especially AI-generated deepfakes) can instantly destroy brand value, outpacing even agile corporate response teams. • Globally, the era of minimal oversight is ending. The EU's Digital Services Act (DSA) mandates that "Very Large Online Platforms" (VLOPs) assess and mitigate systemic risks posed by their algorithms, shifting accountability onto tech giants. • In Asia, regulation often aligns with security. Sri Lanka, as a hyperconnected population, has seen the negative impact of social media during unrest, leading to an ongoing debate about balancing content control with freedom and avoiding political misuse. Singapore uses the interventionist POFMA to enforce corrections on false content. • The path forward requires the communications industry to adopt proactive "truth stewardship," embedding verification and ethical AI use to rebuild public trust in a fractured digital public square.
🚨 India ED Freezes US$ 351 Mn Assets of Reliance Anil Ambani Group
• India’s Enforcement Directorate (ED) has provisionally frozen ₹30.84 billion (US$ 350.87 Mn) in assets linked to the Reliance Anil Ambani Group as part of an ongoing money-laundering investigation. • The probe focuses on loans exceeding US$ 568.86 Mn taken from YES Bank between 2017 and 2019, where investments allegedly delivered no returns. • Key Allegations: Funds were part of a scheme to siphon off ₹30 billion (US$ 350 Mn) via Reliance Home Finance Ltd and Reliance Commercial Finance Ltd to shell companies, involving funds routed through mutual funds and alleged bribes to bank officials. • Assets frozen include residential units and land parcels across Mumbai, Delhi, and Chennai, including industrialist Anil Ambani’s family residence. • The ED is separately probing Reliance Communications Ltd and affiliates for the alleged diversion of over ₹136 billion (US$ 1.55 Bn) through loan evergreening and fund rerouting.
STR Launch Unlocks Credit for Sri Lankan SMEs 📈
• Sri Lanka has launched the Secured Transactions Registry (STR), a significant reform aimed at enabling greater credit access for SMEs, MSMEs, and entrepreneurs. • Core Mechanism: The STR allows businesses to secure loans using movable collateral (such as machinery, inventory, and equipment) instead of relying solely on fixed, immovable assets which many SMEs lack. • National Context: This initiative addresses a key barrier for SMEs, which form over 75% of all businesses and provide 45% of jobs in Sri Lanka, reinforcing the backbone of the national economy. • Key Partners: The STR is a collaborative effort led by the Credit Information Bureau (CRIB), in partnership with the Central Bank of Sri Lanka and the Ministry of Finance, with technical assistance from the International Finance Corporation (IFC) and funding from the European Union. • The new registry introduces simple rules, an efficient digital filing system, and robust legal protections, marking a transformative step toward greater financial inclusion and economic growth.
🇱🇰 Major Step for Cyber Safety: Sri Lanka Signs UN Cybercrime Convention 🌐
• Sri Lanka last week signed the historic UN Convention Against Cybercrime (UNCC) in Ha Noi, Viet Nam, becoming one of 72 UN Member States and the EU to join the first-ever UN Convention of this nature. • Regional Focus: Sri Lanka and Maldives are the only two South Asian countries to have signed the UNCC so far, highlighting a strong commitment to international cybersecurity cooperation. • Strategic Alignment: The move, spearheaded by the Digital Economy Ministry, reinforces Sri Lanka’s commitment to its National Cyber Protection Strategy (2025-2029) and Digital Economy Blueprint. • Domestic Mechanism: The Cabinet has directed the Digital Economy Ministry to initiate an inter-Ministerial mechanism to prepare for the Convention's ratification within three months, focusing on legal and technical readiness. • Focal Point: The Sri Lanka Computer Emergency Readiness Team (SL-CERT) is designated as the national focal point for this landmark UN Convention. • Precedent: This new engagement builds on Sri Lanka’s previous efforts, having been the first State party in South Asia to join the Budapest Cybercrime Convention back in 2015.
Navy Seizes Massive Rs. 5 Bn Drug Haul off West Coast ⚓
• The Sri Lanka Navy successfully intercepted a local multi-day fishing vessel in a deep-sea operation off the west coast, seizing a large consignment of narcotics. • The estimated street value of the confiscated drugs is close to Rs. 5 Billion (Rs. 5 Bn). • Total quantity seized exceeds 350 kilograms, comprising both heroin and crystal methamphetamine ("ice"). • The vessel and suspects have been handed over for further joint investigation by the Navy and the Police Narcotics Bureau.
🔔 SEC Sri Lanka Marks 38 Years of Capital Market Stewardship
The Securities and Exchange Commission of Sri Lanka (SEC) celebrated its 38th Anniversary with a bell-ringing ceremony at the Colombo Stock Exchange (CSE) on 30 October. • CSE Chairman highlighted the SEC’s "steadfast partnership" and critical leadership in strengthening Sri Lanka’s capital market. • SEC Chairman Prof. Hareendra Dissabandara noted the Commission's history, established in 1987 and now operating under the comprehensive SEC Act No. 19 of 2021 (replacing the initial 1987 Act). • Key clarifications on the SEC’s role: • The SEC is only one part of the entire securities ecosystem, working alongside issuers, investors, the CSE, and other professionals. • The Chairman categorically affirmed that the core regulatory role has not been forgotten, despite the focus on market development. • The SEC reaffirms its mission to create a fair, orderly, and transparent capital market while protecting investors, with a vision to become a regional leader in effective regulation.
Urgent Need to Revive Welding Skills: Proposal for National Advisory Board 🛠️
A formal proposal has been submitted to the Ministry of Education and the Ministry of Skills Development, warning of an "alarming decline" in the quality of welders from Sri Lanka's vocational training institutes. • The decline severely handicaps key local sectors including manufacturing, construction, and marine engineering, forcing industries to import welders from countries like India and China. • Despite global demand, only about 5% of graduates from national institutions are deemed competent for foreign job markets (UK, South Korea, Japan, Middle East). • This represents a major national economic loss: the initial salary for a skilled welder is around US$ 2,500/month, significantly higher than the average salary for unskilled foreign employment (~$400/month). • The core issue stems from insufficient practical training, weak assessment systems, and a lack of alignment with international standards (e.g., ISO 9606, AWS). • Way Forward: The proposal calls for the urgent establishment of a National Advisory Board for Welding Technology to: 1. Reform curricula and align training to international qualifications. 2. Design a mandatory national apprenticeship framework in collaboration with industry. 3. Facilitate global partnerships (e.g., TWI UK) to boost quality, generate foreign exchange, and restore industry confidence.
COPE Flags Major State Ownership Dilution & Audit Evasion at LTL Holdings (CEB Link) ⚡
The Committee on Public Enterprises (COPE) has raised serious concerns over ownership changes, governance, and audit practices at LTL Holdings, a key company partly owned by the Ceylon Electricity Board (CEB). • Ownership Dilution: State ownership (CEB's stake) has been sharply diluted from an initial 70% to the current 35%. • Transfer Mechanism: This drop largely resulted from the transfer of 28% of CEB's shares to West Coast Power Ltd. (operator of the Yugadanavi Power Plant) to offset Rs. 26 Billion of the Rs. 79.4 Billion debt the CEB owed for electricity purchases. • Current Shareholding: Now stands at: CEB (35%), West Coast Power (28%), Peradiv Ltd. (27%), and Tepro Investments (10%). • Audit Evasion: LTL Holdings has avoided examination by the Auditor General’s Department since 2015, prompting COPE to demand immediate measures to enforce a State audit, given its establishment with public funds. • Governance Concerns: Issues were raised over conflicts of interest, as both the Founder and current CEO are former CEB officials, potentially influencing power procurement. COPE also demanded a full report on the conversion of a 10% employee trust into Tepro Investments and alleged non-payment of dividends to CEB employees.
NHDC Convenes on Future Health Strategy 🇱🇰
• The National Health Development Committee (NHDC) recently met to discuss the future of Sri Lanka's national health policies and strategies. • The high-level session took place at the Sri Lanka Foundation Institute. • Discussions were held under the patronage of the Secretary to the Ministry of Health and Indigenous Medicine. • Specific details on policy outcomes or decisions are not included in the provisional data.
NHDC Convenes on Future Health Strategy 🇱🇰
• The National Health Development Committee (NHDC) recently met to discuss the future of Sri Lanka's national health policies and strategies. • The high-level session took place at the Sri Lanka Foundation Institute. • Discussions were held under the patronage of the Secretary to the Ministry of Health and Indigenous Medicine. • Specific details on policy outcomes or decisions are not included in the provisional data.
🚨 IVS-GBS Issues Statement on Sri Lanka Online Visa Audit Report 🚨
GBS Technology Services & IVS Global FZCO (IVS-GBS), the prime contractor, has issued a limited statement regarding the Special Audit Report (Oct 3, 2025) on the Online Visa Issuance Methodology of the Department of Immigration and Emigration (DIE). • Outsourcing Agreement: The audit relates to the December 21, 2023, outsourcing agreement for eVisa and related services between IVS-GBS, V F Worldwide Holdings Ltd (VFS - technical partner), and the DIE. • Key Clarification: IVS-GBS affirmed that it agreed with the DIE, as the prime contractor, to collect and remit visa revenues to the Department. • Process Observation: The company notes that the audit report’s findings were made without affording IVS-GBS an opportunity to present evidence and explanations. • Next Steps: The matter is currently sub judice. IVS-GBS confirms it will provide detailed representations before the appropriate forum when required and intends to engage directly with the Auditor General’s Office for clarification. • Commitment: The company re-emphasized its commitment to transparency, cooperation, and compliance with the Government of Sri Lanka.
SL Property Tax Reform Urged: Digital Valuation Needed by 2027 IMF Deadline 📈
• A Verité Research study warns that Sri Lanka’s current Property Tax system yields negligible revenue, raising less than 0.1% of GDP in 2021-22, and cannot support the new tax planned by 2027 under the IMF EFF. • Core Problem: The valuation system is outdated. Only about 120,000 properties (3.5% of the 3.5 million on record) received new annual valuations in 2022-23, implying an average property is revalued once every three decades. • Compliance Issue: The Colombo Municipal Council estimates that only about 20,000 of roughly 110,000 commercial properties regularly pay property tax. • Recommendation: Replace manual, site-inspection valuations with digital mass-appraisal techniques, specifically Points-Based Valuation (PBV), which uses aerial imagery and GIS to create a fair, low-cost, and enforceable tax base. • Local Governance: Local councils rely on Treasury grants for about 80% of funding. The Government's 20% cut to recurrent grants from 2024 is seen as an incentive to urgently adopt systems like PBV to build local revenue capacity.
📰 Lankan Conglomerates Face Impact from Indonesia's Palm Oil Land Laws
• Carson Cumberbatch PLC and Bukit Darah PLC's subsidiary, Goodhope Asia Holdings Ltd., have been impacted by new Indonesian forest area management regulations. • Approximately 12,000 hectares of their palm oil plantation land (5,877 ha planted, 6,275 ha unplanted) have been reclassified and transferred to a State-owned enterprise, PT Agrinas Palma Nusantara (PT ASN). • This action follows new regulations and the establishment of a Presidential Task Force for the repossession of lands categorized as forest status. • Current Status: Goodhope Asia Holdings Ltd. is in discussions with PT ASN regarding potential management arrangements for the affected plantations. • Plantation activities within these areas are not currently prohibited. • The companies have confirmed they have not received any notification or demand for payment of penalties so far, and the potential financial impact is currently undeterminable. • Wider Context: The new regulations have affected 587 companies and approximately 1.5 million hectares in the Indonesian Palm Oil sector overall.
🇮🇳 Visa & Consular Services: Indian High Commission Takes Over Direct Management
• The Indian High Commission (IHC) in Colombo will transition to directly managing all visa, passport, and consular services across Sri Lanka. • This follows the cessation of services by the current outsourcing partner, IVS Lanka, effective 31 October 2025. • New Procedure Start Date: Direct services by the IHC and its offices will commence on 3 November 2025. • Service Locations: Services will be handled at the High Commission in Colombo, the Assistant High Commission in Kandy, and the Consulate General in Jaffna. • Applicants seeking services are strongly advised to check the official website (hcicolombo.gov.in) for updated procedures and instructions.
📈 CoPA Flags North Western PC Project Irregularities & Directs Recovery of Rs. 85 Mn Arrears
• The Committee on Public Accounts (CoPA) has raised serious concerns over procedural and financial irregularities in the North Western Provincial Council’s six-storey office building project in Kurunegala. • Project Status: Construction is currently suspended due to a supervisory inquiry. • Key Flaws: CoPA noted the absence of a mandatory feasibility study and questioned the necessity of the 'Design and Build' procurement process, suggesting it unnecessarily increased the financial burden. • Directives: CoPA directed that all procurement documents and related project records be submitted to the Auditor General within one month and summoned relevant officials for further examination. • Financial Accountability: CoPA highlighted that approximately Rs. 85 million in tax arrears remain unrecovered due to supervisory shortcomings, instructing a report on the total recoverable amount by year's end. • Other Issues: The Provincial Land Commissioner's Dept. was criticised for poor record-keeping of State lands (including leased lands and rental arrears). CoPA also reviewed loan recovery efforts for funds distributed to paddy-producing co-operative societies.
New National Commission on Women (NCW) Set to Begin Operations 🛡️
• The National Commission on Women (NCW), an independent body, was established under the Women’s Empowerment Act No. 37 of 2024 and is set to commence functions soon. • Core Mandate: To safeguard and promote the rights and protection of women across the country. • Key Focus: The NCW will address complaints regarding issues, harassment, and injustices experienced in both Government and private sector workplaces. • Legal Facilitation: It will also assist women by providing necessary guidance related to ongoing legal cases within the judiciary. • The commission is led by Chairperson Dr. Ramani Jayasundara and comprises a seven-member team. • Officials have received instructions to expedite the provision of infrastructure and arrangements to ensure the Commission begins operations immediately.
🚨 SL Road Safety & Drug Testing: New Laws Headed to Parliament 📈
The Cabinet has approved two key proposals under the Motor Vehicles Act aimed at enhancing road safety and curbing driver impairment, which will now be submitted to Parliament for approval. • Driver Drug Testing Formalized: • Motor Vehicle (Drug) Directive No. 1 of 2025 establishes a clear legal framework and testing threshold for narcotics. • Police are now empowered to refer drivers suspected of drug use to a Government medical officer, strengthening enforcement against impaired driving. • Mandatory Expressway Seat Belts: • The Motor Vehicles Directive (Expressway) No. 02 of 2011 has been amended. • It now mandates seat belt use for every passenger occupying any seat in vehicles travelling on expressways, addressing recent rising fatal accidents. • Implementation Note: The Government confirmed a renewed commitment to reducing accidents. Complaints regarding seatbelt shortages/soared prices were dismissed, citing a sufficient three-month lead time given to motorists and importers to comply.
🚨 Cybercrime Threat Looms: Sri Lanka Faces Up to \$1Bn Annual Loss
• Experts warn that Sri Lanka faces an estimated annual loss of US\$ 450 million to up to US\$ 1 billion due to cybercrime, signaling an urgent need for stronger vigilance and governance. • The warning came during the "Mastering ISO 27001 Auditing" workshop, which focused on aligning local systems with global information security standards (ISO 27001:2022) and Sri Lanka’s Personal Data Protection Act (PDPA). • Information security must now be viewed as a strategic business enabler, moving beyond mere compliance to safeguard trust, reputation, and business continuity. • New Zealand High Commissioner David Pine stressed that cybersecurity awareness is the "first line of defence," emphasizing education and shared responsibility across all organisations and individuals. • Organisations are urged to adopt international standards and strengthen governance frameworks to ensure resilience and long-term sustainability in Sri Lanka’s digital economy.
VFS Global Clarifies Role in Sri Lanka eVisa Outsourcing Amidst Audit Spotlight 📰
VFS Global has issued a limited statement clarifying its position regarding the Sri Lanka eVisa outsourcing agreement, following media reports stemming from a Special Audit Report (dated Oct 3, 2025). • The Outsourcing Agreement, signed on December 21, 2023, involves the Department of Immigration and Emigration, IVS Global FZCO (IVS-GBS), and V F Worldwide Holdings Ltd (VFS Global). • VFS Global stated its role is limited to being a technical partner, with IVS-GBS identified as the prime contractor. • VFS emphasized that its function globally is exclusively administrative and non-judgemental, not involving the assessment part of the visa process. • The company confirmed its commitment to transparency and compliance with Sri Lankan competent authorities. • VFS Global also noted it offered full support and information to the Office of the Auditor General on November 7, 2024, but received no response, reiterating its commitment to future cooperation. • VFS noted that the captioned matter is currently sub-judice.
🚨 Call for GSMB Investigations Unit 🇱🇰
• Minister of Industries and Entrepreneurship Development, Sunil Handunnetti, has urged the immediate establishment of an Investigations and Raids Unit within the Geological Survey and Mines Bureau (GSMB). • The primary objective of this new unit is to significantly enhance oversight and accountability within the geological and mining sector. • This measure is aimed at strengthening regulatory enforcement in key industries.
📈 End to Political Interference in Foreign Jobs; E-Visa Audit Reveals US$ 1.4 Mn Tax Loss
Foreign Affairs, Foreign Employment and Tourism Minister Vijitha Herath has announced significant policy shifts and provided details on the controversial e-Visa audit. • Foreign Employment Reforms: • The government has ended the long-standing culture of political interference, where ministers and their secretaries allegedly took money to send people, particularly to Israel. • Overseas job selection is now transparent, focusing on qualified candidates and strict adherence to the MoU with Israel (PIBA handles selection). • Legal action is being taken against fraudsters, including licensed agencies for Romania that charged up to Rs. 1.9 million without providing jobs. • Migrant Worker Welfare: • The Government is committed to granting Voting Rights to Sri Lankans living overseas, with a special committee already appointed to prepare the legal framework. • A new contributory pension scheme for migrant workers is being initiated to provide greater financial security, replacing the current ineffective system. • E-Visa Audit Findings (April-Aug 2024): • The special audit report is crucial evidence in the ongoing court case, citing "major procedural lapses" and a lack of transparency in the contract award. • GBS, IVS, and VFS failed to remit collected taxes, resulting in a loss of US$ 1,418,360 to the Government (comprising $172,970 SSCL and $1,245,390 VAT). • The firms handled 373,991 applications, generating approximately US$ 6.9 Mn in service-fee revenue, plus an additional US$ 1.8 Mn from fee-waiver countries. • The audit questioned the steep service fee of $18.50 per application under the new system, compared to the previous ETA charge of $1.
🚨 BIA Drug Bust: Canadian Arrested with Rs. 182.53 Mn Hashish
• Sri Lanka Customs’ Narcotics Control Unit (NCU) arrested a 21-year-old Canadian national at Bandaranaike International Airport (BIA) on Monday (Oct 27). • The suspect, arriving from Dubai, was attempting to smuggle 18,253 grams (18.25 kg) of hashish into the country. • The narcotics were carefully concealed within the suspect's checked-in luggage. • The seized hashish is estimated to be worth approximately Rs. 182.53 Million in street value. • The suspect and the contraband have been handed over to the Police Narcotics Bureau (PNB) for further investigation and legal action. • Customs highlighted the ongoing vigilance of the NCU in preventing transnational drug trafficking through the main international gateway.
Cabinet Approves New Bill to Regulate Container Depot & Logistics Operations ⚖️
• Cabinet has approved the publishing of a new Bill in the Government Gazette and its subsequent submission to Parliament for approval. • The core aim is to issue fresh licences for container depot operators and amend existing licensing laws governing the shipping and logistics sector. • The Bill amends the Licensing of Shipping Agents, Freight Forwarders, Non-Vessel Operating Common Carriers and Container Operators Act, No. 10 of 1972. • Key objectives include: • Strengthening regulatory oversight of shipping and logistics sectors. • Improving licencing procedures for operators. • Ensuring compliance with international operational standards for container depot and freight handling operations. • The draft legislation has been completed by the Legal Draftsman and cleared by the Attorney General.
SAPRI Drives Policy Dialogue & Youth Empowerment for SL's Future 🇱🇰
The South Asia Policy and Research Institute (SAPRI) marked its 15th anniversary by launching the six-part "Policy Pulse: Youth Voices for South Asia" series to foster public participation in national decision-making. • The second session, "Gender-based violence: Breaking the silence," generated key policy recommendations to strengthen Sri Lanka's domestic violence legislation and reform laws affecting women, children, and marriage. • These recommendations will be refined into one of six policy briefs for presentation to policymakers at a roundtable and conference in 2026. • SAPRI is also advancing transformative projects in reconciliation and youth empowerment. This includes a pilot Science Education program in Mullaitivu, planned for island-wide scaling, which is crucial for future skilled workforce development. • The institute's mission is to build a generation of civic thinkers who can translate dialogue into concrete policy action, impacting national governance and social stability.
🚨 Worrying Decay in Sri Lanka's State University System
• The alarming systematic decline of the island's State university system was recently highlighted by a physical clash between two student batches at the University of Ruhuna over a cricket match score, leading to arrests. • Beyond trivial conflicts, many universities, especially outside the Western Province, are plagued by student unrest, indefinite closures, and widespread inhumane ragging of newcomers. Exceptions include Colombo, Moratuwa, and Sri Jayewardenepura. • Despite the generous taxpayer-funded free university education legacy, the system disproportionately benefits the upper middle class. Financial aid schemes (e.g., Mahapola) are reportedly misused through understated income declarations and bribery of officials. • Pathetic public finances, with revenue consumed by salaries and interest, leave little for meaningful improvements, contributing to substandard hostel facilities and poor canteen food across the 19 State universities, which now cater to 490,000 students. • The article stresses caution regarding further expansion, urging priority be given to resolving existing deficiencies and calling for serious evaluation and introspection by the academic community to drastically improve standards.
GI Status: Powering Value for Sri Lankan Exports 📈
• Geographical Indications (GIs) are emerging as a powerful tool for Sri Lanka to enhance the value of its agricultural and artisanal heritage, ensuring sustainable rural development and market competitiveness. • Current Progress: This strategic shift is marked by the EU registration of Ceylon Cinnamon and the ongoing GI application for Ceylon Tea. The Ceylon Tea GI project, supported by AFD, recently concluded with an expert conference on the topic. • Key Benefits (SLTB & Experts): • Market Premium: GIs protect origin identity, combat imitation, and position products like Ceylon Tea at a premium in international markets. • Quality Assurance: They help define and enforce quality standards, ensuring full traceability and protection against fraud. • Collective Action: The process fosters inclusive governance and collective action; the Ceylon Tea specification development involved over 500 operators. • Territorial Development: Well-managed GIs can attract investment, boost tourism (e.g., tea tours, spice gardens), and sustain rural livelihoods. • Strategic Path Forward (IPS): Experts recommend streamlining the GI system by: • Establishing a dedicated GI division within the NIPO. • Creating a nationally recognized GI logo for consumer trust. • Forming a GI Council including NIPO, EDB, Tea Board, and producer groups for coordinated policy. • Promoting initiatives like a 'One District, One GI Product' program.
📱 Hutch & TRCSL Host Regional Telecom Regulators (SATRC)
• Hutch Sri Lanka partnered with the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) to host the high-profile ceremony for the 2nd Meeting of the South Asia Telecommunication Regulators’ Council (SATRC) Working Group on Policy, Regulation and Services on September 23, 2025. • The event drew nearly 75 delegates, including senior representatives from TRCSL, the Digital Economy Ministry, and leading telecom regulators from 10 nations across South and Southeast Asia (including India, Pakistan, Bangladesh, and the Maldives). • The gathering aimed to lay unofficial groundwork for strengthening regional regulatory cooperation, strategic networking, and exchanging ideas among regulatory bodies. • Hutch reinforced its role as a strategic telecom leader, demonstrating a commitment beyond commercial interests to contribute meaningfully to regional telecommunications governance and technological advancement. • Hutch CEO stated, "Connectivity is no longer a utility; it is an enabler of national productivity."
📈 Call for Forensic Audit on Royal College SDS Finances
An alumnus has formally requested the Auditor General to initiate a comprehensive investigative forensic audit into the Royal College School Development Society (SDS) activities for the past 10 years, citing severe irregularities in the 2024 financials. • The statutory auditor issued a "disclaimer" audit report for the RC-SDS for the year ended December 31, 2024. • The disclaimer's primary basis is the non-recognition of income from 13 material sources in the books, including major events like the Royal Thomian cricket match, Royal Trinity Bradby shield Rugger match, and RCU swimming pool. • Auditors were also unable to verify event income balances totaling over Rs. 18.06 Mn (including Rs. 15.02 Mn from Clubs/Societies) due to a lack of sufficient audit evidence. • An unauthorised write-off of Rs. 3.3 Mn is deemed minor when compared to the scale of non-accounting of main income sources. • The letter was also copied to the Education Ministry Secretary and suggests the previously missing 2023 report was "fraudulently omitted" due to likely similar adverse findings.
CIABOC Briefs Foreign Ministry Officials on Anti-Corruption & Ethical Conduct 🏛️
• The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) conducted an awareness program on "Combatting Corruption and the Relevance of Integrity and Ethical Conduct.” • The session was held for officials of the Ministry of Foreign Affairs, Foreign Employment and Tourism, including officers of the Sri Lanka Foreign Service (SLFSA) and Internal Affairs Units. • CIABOC Director General Ranga Dissanayake educated participants on the existing legal framework against bribery and corruption. • Key focus areas included the provision of maximum public service under the law and the public employees' role in building a prosperous Sri Lanka. • The program was organised on the instructions of Minister Vijitha Herath.
Customs Nabs Indian with Rs. 85 Mn Heroin at BIA 🚨
• Sri Lanka Customs’ Narcotics Control Unit arrested a 39-year-old Indian national at the Bandaranaike International Airport (BIA) on Sunday. • Seized: A total of 2.832 kg of heroin, valued at approximately Rs. 84.96 million (Rs. 85 Mn). • The suspect arrived from Kuala Lumpur, Malaysia, on SriLankan Airlines flight UL 315. • The narcotics were discovered concealed within a false bottom of the suspect’s checked-in luggage during an inspection. • The individual and the confiscated heroin will be handed over to the Police Narcotics Bureau (PNB) for legal proceedings following further investigation by Customs. • Customs officials emphasized the vigilance of their officers and the importance of continued inter-agency coordination in curbing narcotics smuggling through Sri Lanka’s ports.
📱 SL Govt. Planning Smartphone Ban for Under 12s
• The Government is planning to introduce measures that will prohibit schoolchildren below the age of 12 years from owning or using mobile phones. • The intention was announced by the Minister of Women and Child Affairs, Saroja Paulraj. • The move is aimed at protecting children from excessive screen exposure and harmful online content. • The plan also seeks to promote healthier development and social interaction among young children.
📈 E-Visa Audit Reveals $1.4 Mn Unpaid Taxes & Major Irregularities
• A special audit by the Auditor General’s Department on the e-Visa system (Apr.-Aug. '24) found that operating companies failed to remit over US$ 1.41 Million in taxes. • Unpaid Tax Liability: The total of $ 1,418,360 includes $ 1,245,390 in VAT and $ 172,970 in SSCL. • Revenue Routing: All visa-related revenue was routed to foreign bank accounts controlled by private operators, instead of official Government channels. Consequently, the AG Department could not verify the total revenue collected. • Service Fees & Earnings: • Operators (GBS Technology Services/IVS Global-FZCO) processed 373,991 applications, generating a minimum of $ 6.9 Mn in service-fee revenue, plus an additional $ 1.8 Mn from fee-waiver countries. • A uniform service fee of $ 18.50 was charged to all applicants, including those entitled to free visas. The audit questioned this increase, particularly for categories designed to attract tourist and business arrivals. • Irregularities: The firms were selected without a formal tender, violating Government procurement rules, and failed to remit the collected taxes and levies.
SL Achieves Major Data Protection Milestone 🛡️
• CICRA Campus successfully concluded Sri Lanka's inaugural Certified Data Protection Officer (DPO) Training Program, marking a significant step towards robust national compliance. • This achievement nurtures the first batch of qualified DPOs essential for implementing the Personal Data Protection Act (PDPA) requirements. • The intensive four-day program attracted a high-calibre cohort of senior professionals, including CEOs, Directors, and specialised Heads from legal, compliance, and IT/security functions. • Training provided practical expertise in key PDPA areas: conducting data audits, managing security breaches, and establishing comprehensive organisational data protection frameworks. • The program featured trainers and guest speakers who are leading industry experts, including former and current members of the PDPA Drafting Committee. • This initiative, alongside the Data Privacy & Protection Summit 2025 (3 July, 350+ attendees), strengthens Sri Lanka's overall capacity in data governance, positioning it as a key player in the region.
📈 Govt. Amends Law for FDI Boost: Tax Incentives Revived for Strategic Projects
• Cabinet approved amendments to the Mahinda Rajapaksa-era Strategic Development Projects (SDP) Act to reintroduce tax incentives aimed at attracting large-scale Foreign Direct Investment (FDI). • The move seeks to circumvent existing limitations on tax concessions under the IMF program to revive critical, capital-intensive projects. • Key projects targeted include the US$ 3.7 Bn Hambantota oil refinery and various Port City projects, which were previously stalled due to the absence of tax benefits. • Cabinet Spokesman assures that the incentives are limited and project-specific, intended to support economic recovery while maintaining fiscal discipline under the IMF. • The decision faces caution: The IMF previously warned against tax exemptions weakening revenue performance. The World Bank and Human Rights Watch also cautioned on the adverse economic and social consequences of long-term tax holidays. • Local analysts highlight that granting tax concessions for projects like the Port City is seen as "unjust to other tax payers and corrosive to the broader economy."
📈 CoPF Approves Higher Levies on Imports & Demands Major Tariff/Excise Reforms
• The Committee on Public Finance (CoPF) has approved increased Special Commodity Levies (SCL) on key imports, effective 26 August 2025, aimed at protecting local farmers during the 2025 Yala season. • Levy Hikes: The SCL on imported big onions increased by Rs. 10/kg (from Rs. 40 to Rs. 50), and on imported potatoes by Rs. 20/kg (from Rs. 60 to Rs. 80). • Tariff Reform Mandate: CoPF demanded an overhaul of the national tariff structure to be sustainable, simple, transparent, and predictable. Ministries were directed to assess the shift to a four-band import duty system and the gradual phase-out of para-tariffs (SCL/CESS) between 2027 and 2030. • Agricultural Support: A national project was recommended to promote high-yield cultivation kits for big onions and integrate storage/buy-back schemes within five years to reduce dependence on tariffs. • Excise Enforcement: New rules were approved to tighten duty collection from liquor manufacturers. Non-payment will now lead to production suspension after 30 days and a halt to distribution/sales after 90 days, replacing the previously insufficient penalty mechanism.
🏗️ Sri Lanka Approves National Building Code Development
• The Government is developing a National Building Code for Sri Lanka to strengthen regulation, quality, and safety within the construction sector. • The initiative is being formulated with technical assistance from the World Bank Group, and the NBRO's project proposal has received Cabinet approval. • The new codes will be comprehensive, covering key areas including structural integrity, fire safety, electrical/plumbing systems, energy efficiency, and disaster resilience. • This development addresses long-standing issues in the industry and aligns with a priority recommendation from the International Monetary Fund (IMF). • Once established, the framework will introduce legally enforceable standards for the design, construction, and maintenance of buildings, ensuring better health and resilience against natural disasters.
CEB Engineers Flag Major Flaws in Energy Reform Transfer Plan 🚨
The Ceylon Electricity Board Engineers’ Union (CEBEU) has called for immediate intervention from the Sectoral Oversight Committee, alleging serious legal and procedural violations in the ongoing electricity sector reform process. • Legal Violations: CEBEU states the reforms violate the Sri Lanka Electricity Act No. 36 of 2024 and the Electricity (Amendment) Act No. 14 of 2025. • Transfer Plan Dispute: The core issue is the Preliminary Transfer Plan (PTP)—a mere 10-page document outlining the transfer of CEB assets and liabilities to new companies. • Lack of Consultation: The PTP draft was reportedly rushed for internal comment (4 working days) and approved by the Minister of Finance on 11 Oct without any stakeholder consultation with employees or unions. • Statutory Deficiencies: The PTP allegedly fails to meet key statutory requirements, lacking critical details on: • Asset/liability allocation and valuation. • Financial plans for successor companies. • Framework for employee transfers and pension fund contributions. • Structural Issues: Only four of the six planned successor companies have been incorporated. • Union Warning: CEBEU warns that implementation of the PTP in its current form could lead to the entire electricity sector facing "collapse" due to the Ministry's handling of the process. The union urges a review and proper consultation.
🇦🇪 UAE Court Rules: Total Interest Cannot Exceed Original Loan Value! ⚖️
• Landmark Decision: The UAE Federal Supreme Court has reaffirmed a major ruling prohibiting financial institutions from charging interest on accumulated or compound interest. • Key Cap: The ruling establishes that the total interest payable on any loan must not exceed the original value of the loan principal. • Case Impact: This decision overturned a judgment requiring a borrower to pay AED 1.553 million on an original loan of AED 700,000. The court noted the accrued interest (AED 860,147) violated the principal cap. • Interest Type: The court clarified that only simple interest is allowed on outstanding balances after account closure. Crucially, delay interest (compensation for late payment) must also not cause the total debt to exceed the original principal. • Significance: This sets a powerful legal precedent for limiting debt exposure related to interest charges for borrowers across the UAE.
🚢 US$ 1 Bn X-Press Pearl Fine Shakes Global Shipping Market
• Sri Lanka’s US$ 1 Bn court ruling for the 2021 X-Press Pearl disaster has sparked alarm among global shipping insurers. • James Bean, CEO of the London P&I Club (the insurer), called the judgment "alarming," warning it could significantly drive up global marine insurance premiums. • Impact on Sri Lanka: Sri Lanka is not a signatory to international conventions that cap ship owners’ liability. This exposes owners to unlimited claims, potentially resulting in higher insurance premiums specifically for ships docking at Sri Lankan ports. • Global Risk: Insurers fear that a surge in premiums may push some vessels toward uninsured, unregulated "shadow fleets," increasing global maritime risk. • The issue is further complicated because existing conventions do not cover plastic pellet spills, one of the major environmental impacts of the incident.
🇱🇰 EY Urges Sri Lanka to Adopt Accrual Accounting for Public Finance 📈
• The International Public Sector Financial Accountability Index 2025 by IFAC/CIPFA/IPSASB details global advancements in public sector financial reporting. • Global Status: 31% of jurisdictions currently use a full accrual basis, with 30% remaining on a cash basis and 39% on partial accrual. • Projected Trend: Although high-income nations lead currently, the report projects that by 2030, more middle- and low-income groups will advance to accrual-based accounting. • SL Recommendation: Ernst & Young (EY) Sri Lanka suggests it is an "ideal time" for the Government of Sri Lanka (GoSL) to revisit its plans for adopting accrual-based financial reporting. • Key Benefits: Transitioning to accrual accounting significantly enhances public financial management by: Improving transparency (recognizing all transactions when they occur). Strengthening accountability. Supporting inter-generational equity.
ICCSL Drives Tax Awareness in Universities 🎓
• The International Chamber of Commerce Sri Lanka (ICCSL), spearheaded by its Committee for Research, Knowledge Mobilisation and Taxation (RKMT), has launched a national tax awareness initiative for youth. • The program's core objective is to bridge the tax knowledge gap among undergraduates and position understanding taxation as a key component of responsible citizenship and the social contract with the state. • Recent Session: The most recent successful session was held at the Faculty of Management and Finance, University of Colombo. • Key Practical Insights: Experts from leading firms (EY, KPMG) provided essential practical guidance on key principles, including how to apply for a Taxpayer Identification Number (TIN) and register with the Inland Revenue Department (IRD). • The drive emphasized connecting academic theory with real-world application, covering legal frameworks, compliance, and fostering long-term transparency and trust essential for sustainable national development. • Outlook: ICCSL plans to continue expanding this initiative across multiple universities and academic institutions to reach future entrepreneurs and young taxpayers nationwide.
💊 Proposed Pharma Strategy Sparks Trade Protectionism Debate 📈
• An ADB-commissioned strategy report advocates for restricting pharmaceutical imports to boost local production, currently meeting only 15% of national requirement. • The strategy is criticized as "economic protectionism" and market isolationism, designed primarily to shield domestic manufacturers from fair competition rather than ensuring public health or price competitiveness. • Consumer Impact: Protectionist policies are warned to lead to higher prices for consumers and often lower quality goods. The burden of high prices on Sri Lankan consumers is highlighted by the wage disparity (US min wage worker earns more per hour than SL counterpart earns per day). • IMF & Global Risk: A pivot towards protectionism is viewed as directly contradicting ongoing IMF program reforms based on trade liberalization. This risks undermining program compliance, eroding investor confidence, and damaging Sri Lanka’s international standing. • Crucially, implementing these restrictions could see Sri Lanka globally blacklisted by MNCs (Multi-National Corporations), stalling R&D and potentially resulting in critical medicinal shortages.
Govt. Launches Major Push for Sports Tourism 🏏
• Tourism Minister Vijitha Herath announced the formation of an operations committee comprising public and private sector officials to accelerate efforts to promote sports tourism in Sri Lanka. • The decision follows a key meeting with representatives from the Youth Affairs and Sports Ministry, Sri Lanka Cricket, and various national sports federations. • The committee's core focus is to attract international visitors by fully leveraging national and international sporting events, including cricket, rugby, and football tournaments. • It will also work to integrate existing events (marathons, surfing, cycling) into the broader tourism strategy, improve crucial infrastructure, and enhance global visibility. • Sports tourism is identified as a key component of the Government’s long-term tourism plan, aiming to position Sri Lanka as a leading regional destination.
Police Caution Public Over Predatory Digital Loan Schemes ⚠️
• Sri Lanka Police and the Central Bank (CB) have issued a joint warning regarding a surge in complaints over deceptive online and mobile loan schemes. • Lenders are promoting instant cash without collateral, but borrowers are subsequently facing financial distress due to undisclosed fees and excessive interest rates. • Predatory recovery methods include harassment, repeated calls, and public shaming/defamatory social media posts against those who fail to meet repayments. • A joint probe confirms that many of these digital lending entities are unlicenced and unregulated by the Central Bank. • Public is strongly urged to obtain credit only from institutions authorised and regulated by the Central Bank and to verify their legitimacy before borrowing. Oversight measures are currently being introduced.
🇱🇰 Transport Ministry to clear backlog, 300,000+ driver's licences in 3 months 📈
• The Ministry of Transport, Highways, Ports and Civil Aviation expects to print and distribute over 300,000 pending driver's licences within the next three months. • Procurement for 1 million cards is complete, with a new licence featuring enhanced security slated for introduction later this year. • The Minister instructed officials to install printing machines in every province to significantly accelerate the licence issuance process. • Supplier selection for new vehicle number plates is currently underway, awaiting Cabinet approval for finalisation. • The Committee also reviewed the integrated passenger transport timetable, with plans to identify shortcomings and expand it to more regions for improved efficiency. • A pilot project aimed at reducing elephant-train collisions has been allocated Rs. 2.8 million for installing long-range surveillance cameras on trains along the Batticaloa line.
📈 SL Expands Tax Exemptions for Green Investment & Key Industries
The Government has issued a new Gazette, effective from 15 October 2025, significantly expanding duty and tax exemptions on capital goods for priority development projects via the bonded warehouse scheme. • Objective: Accelerate the transition towards renewable energy and sustainable industrial growth, aligning with the 2026 economic roadmap. • New Scope: The regulation amends the 2018 framework to specifically include Renewable Energy storage as an eligible investment sector. • Eligible Sectors: Registered companies engaged in constructing or expanding facilities in the following five key industries now qualify for the exemptions: Dairy manufacturing Pharmaceutical manufacturing Medical equipment production Solid waste management Renewable Energy generation or storage • Renewable Energy Threshold: Eligible projects must involve at least 1 megawatt (MW) of generation capacity or 1 megawatt-hour (MWh) of storage capacity. • Impact: The measure is expected to attract local and foreign investment into Sri Lanka’s clean energy sector, helping the country move closer to its ambitious target of generating 70% of electricity from renewable sources by 2030.
Sweeping Labour Law Reforms: Four New Bills to Modernise Employment Framework 📜
• The Government is advancing its comprehensive labour law reform agenda, preparing to introduce four new bills to modernise Sri Lanka's employment framework. • These four bills will simplify and consolidate existing laws, specifically covering: • Trade Unions • Labour Relations • Occupational Safety • Termination of Employment • A 17-member committee is reviewing 14 existing labour laws. The goal is to balance worker welfare and protection with enterprise competitiveness and flexibility. • Interim amendments will be made to current laws (e.g., night work for women, labour protection, employment insurance) until the new framework is fully enacted. • Separately, the national policy on occupational safety and health is reaching its final stage. Work is also underway to upgrade the Labour Department’s database to register all workers under the government's digitalisation drive.
📈 Sri Lanka Tourism Boost: Govt Eases Entry & Improves Facilities for Upcoming Season.
• The government's Special Performance Force, appointed by President Anura Kumara Dissanayake, met (Oct 14) to take strict decisions required for the promotion of the tourism industry. • Key Initiatives Discussed: • Easing procedures for obtaining tourist visas and the Electronic Travel Permit (ETA). • Increasing the number of counters at the airport to reduce congestion upon tourist arrival. • Facilitating easier, online ticket purchasing for tourists visiting various sites. • The meeting also focused on addressing issues faced by tourists and parties within the tourism sector. • High-level attendees included Minister Vijitha Herath, Deputy Minister Ruwan Ranasinghe, and corporate heads like John Keells Holdings CEO Krishan Balendra and EKHO Hotels and Resorts VP Nihal Muhandiram.
WHO Regional Committee Session Opens in Colombo 🇱🇰
• The 78th session of the World Health Organisation’s (WHO) Regional Committee for South-East Asia has commenced in Colombo. • Sri Lanka's Health Minister, Dr. Nalinda Jayatissa, was elected to a key regional leadership post. • Minister Jayatissa will serve as the Committee’s Chairman for a one-year term.
Port City Law Amendments Approved by Cabinet 📈
• Cabinet has approved the proposal by President Anura Kumara Disanayake to instruct the Legal Draftsman to prepare amendments to the Colombo Port City Economic Commission Act, No. 11 of 2021. • The revisions are aimed at addressing regulatory gaps and investor concerns, following the repeal of key strategic business regulations on August 4. • The goal is to strengthen the competitiveness of the special economic region, attract foreign direct investment (FDI), and improve Sri Lanka’s global ease-of-doing-business rankings. • New measures are expected to restore investor confidence by clarifying the incentive framework and providing direct solutions to issues faced within Colombo Port City, which is positioned as an international business hub.
📈 Private Sector Minimum Wage Hikes Approved: Rs. 27,000
• The Cabinet has approved the full implementation of the National Minimum Wage of Workers (Amendment) Act, No. 11 of 2025, significantly raising the minimum wage for private sector employees. • Phase 1 Increase: The monthly minimum wage will increase from the current Rs. 17,500 to Rs. 27,000 with effect from 1 April 2025. • Phase 2 Increase: The minimum wage is scheduled to rise further to Rs. 30,000 starting 1 January 2026. • The revised wage applies to all statutory payments, including EPF, ETF, overtime, maternity benefits, probationary pay, and holiday entitlements. • Compliance is mandatory for all employers, including intermediaries and contractors. The Commissioner General of Labour has been tasked with full enforcement across all industries and services.
📈 Cabinet Approves Rs. 1.3 Bn Excise Revenue System Upgrade
• The Cabinet of Ministers has approved the award of a Rs. 1.3 billion contract for a new revenue administration system for the Excise Department. • The contract, which is tax-free, was granted to MillenniumIT ESP Ltd. and Metropolitan Technologies Ltd. This project contributes to the national ICT/BPM sector's involvement in public sector digitalization. • The new system will cover the design, development, implementation, and maintenance of the revenue administration structure. • Expected outcomes include improved efficiency via integrated data exchange, strengthened risk management and revenue reconciliation, and enhanced transparency and accountability in excise operations. • The approval followed the dismissal of three appeals that had been submitted to the Procurement Appeals Board regarding the tender process.
🇱🇰 FIU Boosts Global Fight Against Financial Crime 🛡️
• Sri Lanka’s Financial Intelligence Unit (FIU) of the Central Bank is set to sign Memoranda of Understanding (MoUs) with the Financial Intelligence Units of Vatican City State and Mauritius. • Both proposals have received Cabinet approval, according to Cabinet Spokesman Dr. Nalinda Jayatissa. • The core objective is to strengthen cross-border cooperation and intelligence sharing. • These agreements specifically target the combating of money laundering, terrorism financing, and proliferation financing. • The MoU with the Vatican's FIU (Financial Information Authority of the Holy See) will facilitate the exchange of information to support global efforts against financial crimes.
📈 GRA Urgency: 70% Gambling Activity Online, Dodging Taxes
The Committee on Public Finance (CoPF) has highlighted a major revenue gap concerning gambling activity in Sri Lanka: • Online Domination: An estimated 60-70% of all casino-related activity now takes place through online platforms. • Tax Loss: The State earns zero tax revenue from this significant majority of activity, as only 30-40% occurs in taxed, licensed physical establishments. • Regulatory Push: CoPF urged the immediate establishment of the Gambling Regulatory Authority (GRA) to develop a mechanism for taxing online casinos and overseeing the entire sector. • Government Commitment: Finance Ministry and IRD officials have agreed to implement this, aiming for the GRA to be fully operational by 30 June 2026. • Critical Context: The lack of oversight allows significant revenue loss and compromises Sri Lanka's compliance with FATF standards on anti-money laundering (AML) and counter-terrorism financing.
💼 President Urges Wage Hike for Plantation Workers, Assures Govt. Support
• President Anura Kumara Disanayake held discussions with representatives of major plantation companies (including the Planters' Association of Ceylon and EFC) regarding the proposed increase in estate workers' daily wages. • The President emphasized the importance of a living wage and improving living standards for plantation workers, proposing the increase to be in line with salary increments granted to public and private sector employees in the previous Budget. • The Government assured its fullest support to the industry to implement the wage increment and outlined its policy commitment to develop and strengthen the plantation sector. • Discussions covered the methodology for implementation, following company representatives outlining the current challenges faced by the industry.
⚖️ LAUGFS Suspends Dubai Unit (Slogal Energy) After US Sanctions
• LAUGFS Gas PLC has suspended all commercial operations of its Dubai-based subsidiary, Slogal Energy DMCC, pending a full compliance review. • The decision follows the US Treasury’s Office of Foreign Assets Control (OFAC) naming Slogal Energy for allegedly purchasing and selling Iranian-origin Liquefied Petroleum Gas (LPG) shipments to Sri Lanka and Bangladesh. • LAUGFS asserts Slogal Energy “never knowingly engaged in, or facilitated, any trade involving sanctioned entities or products of sanctioned origin,” stating all transactions followed international trade practices with supporting documentation. • The company is undergoing a legal and compliance review with US sanctions counsel and plans to petition for Slogal Energy DMCC's delisting from the US Treasury's Specially Designated Nationals (SDN) list. • Importantly, LAUGFS confirms its domestic LPG distribution business in Sri Lanka remains unaffected by this development.
Australian Fuel Investor Exits SL, Initiates Dispute Resolution ⛽
• Australian-owned United Petroleum Lanka (UP), which entered the local fuel retail market in August 2024, has initiated formal dispute resolution proceedings against the Government of Sri Lanka (GoSL). • UP suspended fuel supply operations in December 2024, citing the Government's failure to uphold critical contractual terms, leading to an economically unsustainable environment for the investment. • An orderly Exit Agreement, signed in April 2025 and endorsed by the Cabinet, was terminated in October 2025. • The termination occurred because the Ministry of Energy failed to fulfill a key undertaking stipulated in the exit agreement, despite United Petroleum meeting all its obligations and granting extensions. • UP stressed that the difficulties faced—from operation to exit—underscore the vital importance of policy consistency and adherence to contractual arrangements for attracting and retaining foreign investment.
WHO Director-General in Sri Lanka for Regional Health Summit 🌍
• World Health Organisation (WHO) Director-General Dr. Tedros Adhanom Ghebreyesus arrived in Sri Lanka yesterday (October 12th). • The visit is for the 78th Session of the WHO South-East Asia Regional Committee. • The high-level attendance highlights a focus on regional health policy and cooperation.
⚖️ SL Companies Act Amended: Beneficial Ownership Disclosure Mandatory
New amendments (Act No. 12 of 2025) to the Companies Act mandate full disclosure of beneficial ownership, aiming to end anonymous ownership and align Sri Lanka with global Anti-Money Laundering (AML) standards ahead of the FATF evaluation. • Core Requirements: Companies must register beneficial owners, maintain detailed registers for 10 years (even after liquidation), and notify the Registrar of changes within 14 days. The law also explicitly bans bearer shares. • Enforcement: Non-compliance carries substantial fines and criminal liability for directors, secretaries, officers, and shareholders. Ignorance is not an acceptable excuse. • Challenges: Industry experts note significant difficulties in enforcement due to tracing ownership through hidden family wealth and complex offshore structures (e.g., BVI, Hong Kong). Identifying beneficial owners in foreign corporate and fund structures is also complex. • Compliance Facilitation: The Registrar of Companies is preparing regulations, digitalizing the filing system for online submission, and will accept electronic signatures. While the Central Depositary System (CDS) assists, the primary legal responsibility rests with the companies.
✈️ Lawsuit Filed Against Qatar Airways Over Lankan Cardiologist's Death
• The family of 85-year-old Sri Lankan cardiologist Asoka Jayaweera has filed a wrongful death lawsuit against Qatar Airways, alleging the airline’s negligence caused his death. • The incident occurred on a flight from Los Angeles to Sri Lanka. Jayaweera, a "strict vegetarian," was allegedly denied his pre-ordered meal and instructed to consume a standard meal by "eating around" the meat. • He began choking on a piece of food shortly after, with his oxygen saturation levels dropping to a dangerously low 69%. He lost consciousness approximately three-and-a-half hours before the plane diverted to Edinburgh, Scotland. • The lawsuit alleges crew negligence, including refusal of an emergency landing. Jayaweera died on 3 August 2023 from aspiration pneumonia. • The family is seeking damages exceeding the US$ 175,000 statutory limit set by the Montreal Convention. Qatar Airways has not publicly responded to the filing.