President Anura Kumara Dissanayake has announced plans to implement structural reforms within Sri Lanka Customs, aiming to establish an institutional framework that aligns with modern requirements.

During a discussion held at the Presidential Secretariat, senior Customs officials and the President reviewed Budget 2025 and the institutional restructuring process. The discussion focused on addressing inefficiencies, fraud, corruption, and public dissatisfaction with the department’s current operations.

President Dissanayake emphasized the adoption of new technologies to streamline operations and enhance service delivery efficiency. He also directed officials to enforce stringent laws to eliminate inefficiencies and improve overall performance.

The discussion also covered human resource management, including expedited recruitment processes and infrastructure development to support modernization efforts.

Acknowledging the Customs Department’s revenue achievements in the previous year, the President stressed the importance of implementing necessary measures to meet the revenue targets for the current year.

At the invitation of the Royal Thai Embassy in Colombo, the Ceylon Chamber of Commerce, in collaboration with the Sri Lanka Greater Mekong Business Council, hosted a panel discussion on “Business Opportunities between Thailand and Sri Lanka: Food, Agriculture, and Health for Sustainable Prosperity and Wellbeing.” The event, held on March 3 at The Kingsbury Colombo, was followed by a business networking session with a visiting Thai business delegation.

The Thai delegation, organized by the Thai Chamber of Commerce and Industry and the Board of Trade of Thailand, included 17 officials and business representatives. This visit followed a business promotion mission to Thailand in February 2025 and aimed to deepen trade and investment ties, particularly in key sectors that contribute to sustainable development.

The panel discussion featured industry leaders and experts from both countries who explored collaboration opportunities in food, agriculture, and health. Duminda Hulangamuwa, Chairman of the Ceylon Chamber of Commerce, welcomed the Thai delegation’s focus on these sectors, highlighting their alignment with Sri Lanka’s government priorities on food security, agriculture, and tourism-driven services.

Ambassador of Thailand to Sri Lanka, His Excellency Paitoon Mahapannaporn, noted that while Sri Lanka’s traditional exports to Thailand were dominated by precious stones, recent trends indicate growth in raw materials, processed products, plastics, textiles, chemicals, tea, and spices. He emphasized the significant potential for further trade expansion.

Chairman of the Thai Chamber of Commerce and Board of Trade of Thailand, Mr. Sanan Angubolkul, stressed the importance of collaborating on value-added products and services, ensuring greater access to global markets. He led the delegation, which included prominent Thai entrepreneurs from various industries.

Beyond the discussions, the Thai delegation will conduct field visits to gain firsthand insights into Sri Lanka’s food, agriculture, and health sectors, identifying potential areas for collaboration and further strengthening economic tiesbetween the two nations.

Peter Breuer, the IMF’s Senior Mission Chief for Sri Lanka, commended Sri Lanka’s remarkable economic turnaround, stating that the country has made a tremendous recovery from its financial crisis and has a promising future ahead. Speaking at an online press briefing, following the approval of the fourth tranche of US$ 334 million under the Extended Fund Facility (EFF), Breuer suggested that it is time to reverse the brain drain as Sri Lanka is now becoming a more attractive place to live.

Sri Lanka’s economy grew by 5.5%, indicating a strong recovery, and the country has regained 40% of the income lost over the past five years due to the IMF program’s implementation. The latest tranche increases IMF funding to Sri Lanka to approximately US$ 1.3 billion. The IMF backed Sri Lanka’s cost-recovery electricity pricing, emphasizing the need to ensure financial stability in the power sector after January’s 20% tariff reduction.

Breuer underscored the importance of finalizing bilateral agreements with key creditors such as Japan, India, and China, following Sri Lanka’s preliminary agreement on debt servicing. He emphasized that Sri Lanka must boost tax revenue, improve social welfare targeting, and ensure efficient capital spending for better public finance management.

Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka, stressed that SOE restructuring is crucial to stabilizing the economy and reducing fiscal deficits. She noted that mismanaged SOEs lead to taxpayer burdens and financial instability, and highlighted the need for greater transparency, including the timely publication of audited SOE financial statements.

The IMF remains optimistic that Sri Lanka’s economic progress will lead to rising incomes and poverty reduction, opening up better domestic opportunities for its citizens. However, continued reforms are necessary to ensure long-term financial sustainability.

President Anura Kumara Dissanayake emphasized that Sri Lanka has the potential to become a premier tourist destination through strategic urban development, moving beyond traditional construction methods.

During a discussion with officials from the National Physical Planning Department at the Presidential Secretariat, the President directed authorities to integrate Sri Lankan identity into all city planning initiatives.

Balanced Urban and Rural Development

The meeting also explored the government’s vision for developing both urban and rural areas, with a focus on strengthening the rural economy. The President stressed that while urban centers must be modernized, rural culture and livelihoods must be preserved as part of the country’s overall economic progress.

Key Officials in Attendance

The discussion was attended by:

• Dr. Anil Jayantha Fernando – Minister of Labour & Deputy Minister of Economic Development
• Dr. Nandika Sanath Kumanayake – Secretary to the President
• Mahinda Siriwardana – Secretary to the Ministry of Finance
• Russel Aponsu – Senior Additional Secretary to the President
• Ranjith Ariyaratne – Secretary to the Ministry of Urban Development, Construction, and Housing
• W.R. Ruchira Vithana – Director General of the National Physical Planning Department

This initiative marks a significant step in reshaping Sri Lanka’s urban landscape while ensuring that cultural heritage and rural development remain central to national progress.

Except for a few showers in Galle, Matara, Kaluthara and Rathnapura districts in the evening or night, mainly fair weather will prevail over the island.

Misty conditions can be expected at some places in Western, Sabaragamuwa, Central, North-western, Northern and North-central provinces and in Galle and Matara districts during the morning.

Daisy Forrest also known as ‘Daisy Achchi’, grandmother of Yoshitha Rajapaksa, has been summoned to the Criminal Investigation Department (CID) today (March 5) and is currently providing a statement, according to sources.

Internal reports suggest that she is expected to be arrested later today and subsequently produced before the Kaduwela Magistrate’s Court.

Further details regarding the charges or reasons for the interrogation remain undisclosed at this time.

Sri Lankan migrant workers are exempt from the 15% tax and are not subject to taxation on the money they remit to Sri Lanka. Additionally, any interest earned on such remittances held in foreign currency bank accounts is also exempt from income tax under Section 9, in conjunction with the Third Schedule of the Inland Revenue Act No. 24 of 2017 (IRA 2017).

According to the IRA 2017, residents of Sri Lanka are taxed on their global income, subject to certain exemptions, as per Section 69(1). Conversely, non-residents are taxed under the same section only on income derived from employment, business, investments, or other sources within Sri Lanka (Section 4). Since migrant workers earn their income from foreign employers outside Sri Lanka, such income does not fall under “income arising in or derived from a source in Sri Lanka,” making it exempt from taxation.

Residency Status of Migrant Workers

Typically, migrant workers are “domiciled” in Sri Lanka but are not considered “residents” for tax purposes. However, in the year of departure for foreign employment and the year of return, their residency status must be evaluated to determine tax obligations. As a general rule, migrant workers are deemed non-residents and are therefore not liable to pay income tax on their foreign earnings.

Residency status is determined by Sections 69(1) and 70(1) of the IRA 2017:

Section 69(1): A person is considered a tax resident if they either reside in Sri Lanka or are present in the country for at least 183 days within any 12-month period.

Section 70(1): A person who meets the 183-day criterion is considered a resident from the beginning of that period, while others are treated as residents for the entire tax year if they meet the residency conditions.

Understanding “Domicile” vs. “Residence”

Tax residency involves two key concepts:

Domicile refers to a person’s permanent legal home, which is the place they intend to return to, even if they live elsewhere. A person can only have one domicile at a time.

Residence refers to the place where a person physically lives. Unlike domicile, a person can have multiple residences, and it is considered a short-term status.

For instance, a Sri Lankan migrant worker employed in Dubai under a four-year contract is domiciled in Sri Lanka but does not reside there. Section 69(1)(a) considers only those who “reside” in Sri Lanka as tax residents, meaning migrant workers generally fall outside this definition. However, special provisions in Section 70(1) apply in the year of departure and return.

Legislative Background on Residency Definition

Initially, the Inland Revenue Bill of 2017 included “domicile” as a tax residency criterion under Section 69(1)(b). However, this provision was removed following advocacy by the Tax Committee of the Sri Lankan Bar Association to protect migrant workers. The original wording proposed that individuals domiciled in Sri Lanka would be tax residents unless they had a permanent home abroad for the entire year.

Conclusion

 Since the reference to domiciled persons as tax residents was removed from Section 69(1), migrant workers are not subject to income tax on foreign earnings. This exemption remains despite recent budget proposals to impose a 15% tax on service exporters. As a result, Sri Lankan migrant workers can continue to remit foreign income without tax liabilities in Sri Lanka.

Sri Lanka’s tourism industry is experiencing strong growth, with over 492,000 visitors recorded in 2025 so far, reflecting an optimistic outlook for the sector. February alone saw more than 240,000 arrivals, surpassing the previous year’s performance and reinforcing the industry’s upward momentum.

The Sri Lanka Tourism Development Authority (SLTDA) reported an average daily arrival of 8,859 tourists, an increase from last year’s 8,282 per day during the same period.

Following a successful 2024, SLTDA set an ambitious goal of attracting 310,937 visitors in February, after recording 252,761 arrivals in January. While January achieved the highest monthly tourist numbers ever, it still fell short by 52,926 visitors from its projected target of 305,687.

Key source markets contributing to this growth include India, Russia, the UK, China, and Germany. Other significant inflows came from France, Poland, Australia, the Netherlands, and Bangladesh. The industry is closely monitoring the rollout of a global promotional campaign, which is expected to boost arrivals further.

February’s 240,217 arrivals pushed the total for 2025 to 492,978, reaffirming the sector’s positive trajectory. Compared to February 2024, this represents a 10.01% year-on-year (YoY) increase and a 2% rise over 2018, a benchmark year for tourism in Sri Lanka. The average daily arrivals also improved, reaching 8,579 in February, up from 8,154 in January 2025 and 7,044 in February 2024.

However, February’s figures showed a slight 5.22% decline compared to January, reflecting a month-on-month dip despite overall strong performance. Weekly arrival patterns indicated a steady inflow of tourists, with 61,664 arrivals in the first week, 63,163 in the second, 59,606 in the third, and 55,784 in the final week. Despite these numbers, February fell short of its projected target by 70,720 visitors, a 29.44% gap.

India continues to be the leading source market, contributing 35,728 tourists in February, followed by Russia (30,295), the UK (25,528), Germany (17,233), and France (15,469). Other significant contributors included China, Australia, Poland, the US, and the Netherlands. Year-to-date (YTD) figures show India leading with 79,103 arrivals, followed by Russia (64,391) and the UK (47,258).

Sri Lanka aims to attract 3 million visitors in 2025, with a revenue target of $5 billion. In contrast, 2024 recorded 2.05 million arrivals, generating $3.2 billion—reflecting a 52.38% YoY revenue increase. The industry’s positive start in 2025 is evident, with January alone generating $400.7 million, marking a 17.2% increase from the previous year.

With the winter tourist season continuing until the end of March, Sri Lanka’s tourism sector remains optimistic about achieving its ambitious goals for 2025.