By: Staff Writer

Colombo (LNW): The International Monetary Fund (IMF) expects a property and inheritance tax that is currently in the planning will be a key source of additional revenue for the government in the year 2025.

It welcomes the Sri Lankan authorities’ commitment to increase revenues and signal better governance by adopting needed tax measures, strengthening tax administration, and actively eliminating tax evasion.

Maintaining cost recovery in fuel and electricity pricing helps mitigate fiscal risks arising from state-owned enterprises.

Further strengthening the social safety net remains critical to protect the poor and the vulnerable. While inflation has decelerated faster than expected, continued monitoring is warranted to help anchor inflationary expectations and support macroeconomic stability.

Property tax is something that is in the programme, but not quite yet, because it’s something that takes a lot of time to put into place, and it is, in fact, important for the Sri Lankan authorities to make preparations for that,” IMF Senior Mission Chief for Sri Lanka Peter Breuer told a virtual press briefing recently.

He also said that the IMF is extending technical assistance in this regard.“So, it’s important to get started with it. But it will take some time for that to become effective. And it’s envisaged that, in 2025, property tax would be a key source of additional revenue in that year,” he added.

According to the programme documents, Sri Lanka has assured the IMF to revamp the property tax system and introduce a wealth transfer tax by 2025.

“In particular, we will introduce a nationwide real property tax and adjust the system of transfers between the central and provincial governments.

We will also introduce a gift and inheritance tax with a tax-free allowance and minimal exemptions. Preparatory work for these tax reforms will commence by mid-2023, supported by IMF technical assistance,” IMF Programme documents made public in March said.

No comprehensive study has been conducted on the Sri Lankan property market. The majority of property transactions in Sri Lanka involve inheritance and gifts.

IMF approved Program performance at end-June was satisfactory, with all quantitative performance criteria for end-June met, except the one on expenditure arrears.

All indicative targets were also met except the one on tax revenues. Most structural benchmarks were either met or implemented with delay by end-September 2023.

Notably, the authorities published on time the Governance Diagnostic Report. Sri Lanka is the first country in Asia that has undergone the IMF Governance Diagnostic exercise.

Progress is still ongoing on the revenue measures to support the fiscal consolidation during 2024 in line with program parameters.

By: Staff Writer

Colombo (LNW): Against the turbulent economic backdrop, the fate of the Sri Lanka apparel industry accounting for over 45% of the country’s export earnings has further plunged down last month.

Apparel exports in September were down sharply by 26% to US $ 332 million whilst performance in the first nine months was down by 20.5% to $ 3.4 billion.

“September was a bad month. The industry was hoping to see some signs of slight recovery but that may now be October at best,” apparel industry sources said.

Apparel stakeholders were concerned that the lack of steady supply of fuel and electricity would affect the smooth operations of the industry.

On the other, it was noted that brands and retailers have started to move sourcing orders from Sri Lanka to neighboring countries to mitigate the risks.

Some of the expected consequences were loss of business and revenue and re-location of production to other countries.

In September exports to the USA decreased by 34.37% year on year to 122, exports to the EU (excluding exports to UK) also decreased by 24.54% to $ 106.79 million.

At the same time exports to the UK and to other countries also decreased by 4.61% to $ 54 million and 25.19% to $ 50 million respectively in September 2023.

In the first nine months overall exports to the USA decreased by 25.19% to $ 1,36 billion, exports to the EU (excluding exports to UK) decreased by 18.15% to $ 1 billion over the same period in the year 2022.

At the same time overall exports to the UK and to other countries also have decreased by 16% to $ 480 million and 15.94% to $ 538 million respectively over the same period in the year 2022.

Industry sources renewed their call for a more favourable environment if exports pick up in the remainder of 2023 whilst external market conditions remain challenging.

For Sri Lanka, economists predict that it will take at least ten years to reverse the effects of the crisis.

The apparel industry is in urgent need of an inclusive, just, and equitable plan that will ensure not just the resilience and the growth of the industry, but also the material and emotional wellbeing of its workers.

The Government prioritises the needs and wants of businesses, with greater concessions granted to business owners to deal with the crisis.

Existing strategies are strengthened, new strategies are drawn, and new plans are made to uplift the apparel industry.

By: Staff Writer

Colombo (LNW): Power and Energy Minister Kanchana Wijesekera has announced that the Government is exploring the possibility of implementing automated fuel price revisions daily by fuel distributors starting in 2024.

Speaking at the annual general meeting of the Petroleum Shed Owners Association 2023 on Saturday, he emphasised that this initiative reflects a long-term policy envisioned by the Government.

In a significant move towards ensuring a more transparent and responsive energy market, he said: “This is a crucial step in creating a more dynamic and efficient fuel pricing system that benefits both consumers and the industry.”

The Minister highlighted the pressing need for such a policy change in light of the ongoing conflict in Gaza, which has led to heightened market volatility.

He explained that it is anticipated that fuel prices may surge by up to 25% due to geopolitical tensions, underscoring the importance of proactive measures to stabilise prices.

Wijesekera assured the public that the Government has taken pre-emptive steps to safeguard fuel stocks amidst these uncertain times.

“We have made sure that we are well-prepared to handle any potential disruptions in the fuel supply chain. Our strategic reserves are in place to ensure stability even in the face of external challenges,” he added.

Industry experts said the proposed daily automated fuel price revisions would enable distributors to respond swiftly to market fluctuations, providing a more accurate reflection of global oil prices.

This move is anticipated to bring about increased efficiency and competitiveness within the industry, ultimately benefiting consumers.

They noted that the move aligns with international practices in many developed economies, where daily fuel price revisions are already in place.

The dynamic fuel pricing a common practice internationally will replace monthly fuel revision system in accordance with the pricing formula now in force using fortnightly average, international oil prices and rupee- US dollar fluctuations.

The daily price change will remove the high hike in rates that need to be effected at the end of the month and consumer will be more aligned to market dynamics, the power and energy ministry said.

CPC fuel filling stations will be automated to automatically update centrally, besides technology also provides to schedule the oil price change at midnight, he said adding that the new system will be implemented in selected petrol sheds as pilot project.

At the non-automated petrol pumps, dealers would get the updated price by way of four customised SMS’, e-mails, mobile app and web portal. “

These means of communication are also available to dealers of automated petrol pumps,” he disclosed.

Colombo (LNW): Sri Lanka’s top private bank HNB PLC has reaffirmed its long-standing collaboration with Singer, the country’s leading consumer durable retailer and the sole local representative for John Deere.

The collaboration aims to bolster the agricultural sector with cutting-edge vehicles, machinery, and equipment.

This renewed alliance will introduce exciting offers and advantages linked to John Deere’s extensive range of tractors, machinery, and equipment.

Sanjay Wijemanne, DGM of the Retail Banking Group, remarked, “In spite of numerous obstacles, the Sri Lankan agricultural sector has grown by 3.6% compared to last year. Our collaboration with Singer seeks to support this sector’s enduring determination and prowess. I trust our clientele will seize this chance to elevate their enterprises.”

Under this collaboration, the bank will roll out a series of incentives, including reduced interest rates and adaptable leasing plans tailored to individual budgets. Clients can also benefit from discounts and other perks from HNB’s Prestige Prime merchant partner network.

Moreover, customers will receive insurance premium reductions and complimentary life insurance coverage, valued at Rs. 4.5 million, from HNB General Insurance. Should natural death occur, HNB Assurance will provide an insurance payout of Rs. 600,000.

Singer Sri Lanka PLC CEO, Mahesh Wijewardene, expressed, “We’re thrilled to renew our association with HNB. With their enduring commitment to SMEs, we can equip the agricultural sector with the latest machinery for growth.”

Singer will grant free registration and a warranty of 1000 hours or one year to customers leveraging this promotion. They can also receive complimentary filter sets, inclusive of hydraulic filters, up to 1000 hours or until the third service.

Further benefits include three gratis services, an exclusive 10% reduction on John Deere spare parts, convenient home deliveries, round-the-clock service support, and a host of other financial and maintenance advantages.

Additionally, HNB recently earned the title of Best Retail Bank in Sri Lanka for the 13th time at the esteemed International Excellence in Retail Financial Services Awards 2023, organised by the Asian Banker Magazine.