By: Staff Writer

November 11, Colombo (LNW): Sri Lanka’s workers’ remittances reached a new high in October 2025, surging to $712 million, marking the strongest monthly inflow this year and the second-highest in the country’s history, according to the latest data from the Central Bank of Sri Lanka (CBSL). This robust growth underscores the resilience of overseas Sri Lankan workers who continue to anchor the nation’s foreign exchange reserves at a time of fragile recovery and limited export earnings.

The October figure represents a 21.2% year-on-year increase, continuing a seven-month streak of record inflows. It falls just short of the all-time high of $812.7 million recorded in December 2020, during the height of the pandemic when remittance inflows peaked globally. Compared with the $702.6 million in September 2020, the latest figure signals a steady upward trend through 2025, offering a critical buffer against the country’s external vulnerabilities.

Cumulatively, remittances in the first ten months of 2025 topped $6.5 billion, reflecting a 20.1% increase year-on-year and marking the strongest performance for this period since 2016. The total is also 9% higher than the corresponding period in 2016, the benchmark year that saw a record annual inflow of $7.24 billion. With this pace, Sri Lanka is on track to potentially match or exceed its historical high by year-end, provided the current migration and exchange rate trends persist.

The remarkable rebound comes after a turbulent period. In 2022, remittances collapsed to a 12-year low of $3.78 billion amid the island’s worst economic crisis, currency depreciation, and a thriving unofficial hawala market that diverted flows away from the formal banking system. However, since then, a series of policy corrections including the unification of exchange rates, improved banking channels, and tighter monitoring have restored confidence among expatriates.

By 2023, inflows jumped 57% to $5.96 billion, and in 2024, they rose a further 10.1% to $6.57 billion, largely driven by an exodus of workers seeking employment in the Middle East and Europe as domestic job markets remained stagnant.

Looking ahead, the short-term outlook remains favourable. Analysts expect inflows to remain strong through the final quarter of 2025, buoyed by seasonal factors such as year-end remittances, wage bonuses, and higher deployment of skilled workers abroad. This will provide much-needed relief for Sri Lanka’s foreign reserves, help stabilise the rupee, and support import financing in the coming months.

However, economists caution that overdependence on remittances carries risks. Without parallel growth in exports, investment, and tourism, Sri Lanka’s external position remains vulnerable to global shocks and policy shifts in host countries. To sustain this momentum, experts urge continued reforms in labour migration policy, better welfare for migrant workers, and digital innovation in remittance systems to curb informal transfers.

In essence, Sri Lanka’s remittance boom reflects not only the resilience and sacrifice of its overseas workforce but also the crucial role of foreign earnings in cushioning the nation’s fragile recovery a reminder that sustainable economic growth depends on diversifying beyond the remittance lifeline

By: Staff Writer

November 11, Colombo (LNW): In a major policy shift aimed at curbing misuse of tax incentives and ensuring transparency in investment approvals, the Government has moved to drastically cut long-term tax concessions previously granted under the Strategic Development Projects (SDP) Act.

The Strategic Development Projects (Amendment) Bill, 2025, published in the Gazette on 7 November, seeks to limit tax holidays to a maximum of ten yearsdown from the earlier 25 years and introduce stringent oversight mechanisms for investment-related tax expenditures.

Under the new framework, the Board of Investment (BOI) will continue to identify eligible Strategic Development Projects. However, it will now be required to submit each proposal to the Ministry of Finance for a mandatory ex-ante cost-benefit analysis before granting any tax concession.

The Finance Ministry must issue its recommendation within one month, after which the BOI may approve benefits in line with the ministry’s findings. Final decisions will be subject to Cabinet approval and formal publication in the Gazette.

The Bill further introduces ex-post monitoring, requiring the BOI to conduct regular performance evaluations of all approved SDPs. These assessments must be submitted to the Ministry of Finance, which will be responsible for disclosing fiscal impacts and investment outcomes on its official website.

Projects that fail to meet agreed performance indicators risk losing their privileges, as the BOI is empowered to restrict, suspend, or revoke tax benefits and impose administrative penalties after providing due notice and an opportunity for appeal.

To enhance fiscal compliance, all entities operating under the SDP regime will be obligated to file tax returns in accordance with the Inland Revenue Act. They must also pay withholding taxes and ensure that employment incomewhether for resident or non-resident workersis properly taxed. Tax holidays will begin on the date a project’s commercial operations are certified and cannot be extended beyond the initial term.

The Finance Ministry will be required to publish an annual report on all SDP-related tax expenditures and may review the efficiency and continued relevance of these incentives every five years. Any new regulations issued under the Act must be presented to Parliament for approval within three months. Existing tax holidays already in effect will remain valid for their original duration, provided all stipulated conditions are met.

Announcing the move during the 2026 Budget presentation, President and Finance Minister Anura Kumara Dissanayake declared that the era of informal, politically driven investment culture was over. “We are building a new environment where cronyism, racketeering, and nepotism are replaced by credibility and predictability,” he told Parliament.
The President emphasized that the new rules aim to create a rule-based incentive regime to attract credible foreign and domestic investors. Similar reforms are also being introduced to the Colombo Port City Commission Act, with the Government expecting these measures to strengthen investor confidence and accelerate the inflow of foreign direct investment into the country.

November 11, Colombo (LNW): The process of permitting a foreign national to establish a gem business at the Thimbirigasyaya branch of Laksala—an institution originally founded to promote Sri Lankan handicrafts in international markets—is reportedly in progress, with the outlet expected to open tomorrow (12).

According to sources, numerous irregularities and questionable aspects have emerged throughout the course of this initiative.

Laksala, formally known as the Sri Lanka Handicrafts Board, was founded under the National Crafts Council and Allied Institutions Act No. 35 of 1982 with the purpose of advancing local craftsmanship to the global stage. Conceived by the late Prime Minister Sirimavo Bandaranaike, the institution was designed to help rural artisans access fair markets and improve the quality and reach of traditional arts and crafts. Laksala operates through a network of retail outlets and functions as a self-financing entity without dependence on government funding.

During the Covid-19 pandemic, Laksala—like many other businesses—faced severe financial challenges and was unable to pay staff salaries. In response, the then State Minister for the sector, Dayasiri Jayasekara, entered into an agreement with SALA Global, a company under SALA Enterprises, which includes a Chinese director. The agreement sought to create an online platform to sell Laksala’s products in markets such as the United Arab Emirates (UAE), Japan, and China. However, this venture ultimately failed to achieve its intended results.

Subsequently, SALA Global expressed interest in the small-scale gem sales that Laksala had been conducting for years. These gem sales, though limited in scope, were intended to allow tourists purchasing local handicrafts to buy Sri Lankan gems conveniently at the same location. Revenue from these sales helped sustain the institution and ensured that artisans received fair compensation for their work.

It is reported that the aforementioned Chinese businessman later submitted a proposal to the then State Minister, Prasanna Ranaweera, seeking to expand this initiative into a large-scale gem business operating under the Laksala brand. Detailed plans were prepared for this purpose. However, the project failed to progress during Minister Ranaweera’s tenure due to a number of complications and unresolved concerns.

Under the current “Renaissance” administration, it is understood that the same businessman has now completed the necessary preparations and intends to inaugurate the new venture imminently.

This development has raised several significant concerns.

Firstly, Laksala was established by an Act of Parliament with the sole mandate of supporting and marketing products of local artisans—not for generating profits for foreign entities. The proposed gem business therefore diverges from Laksala’s founding purpose.

Secondly, Laksala was never intended to engage in large-scale gem trading. That responsibility lies with the Sri Lanka Gem and Jewellery Authority, which regulates the industry and oversees gem sales by local traders. Given this, the decision to allow a Chinese businessman to conduct gem trading operations within Laksala’s premises is highly questionable.

A third and particularly serious concern relates to potential damage to the reputation of both the Laksala brand and the Sri Lankan gem industry. There have been numerous incidents of counterfeit or low-quality gems being sold to tourists by foreign traders falsely marketed as Sri Lankan products—often involving Chinese nationals. Granting a Chinese businessman the right to operate under the state-backed Laksala name risks undermining consumer confidence and tarnishing Sri Lanka’s international reputation for genuine gemstones.

Fourthly, serious questions arise as to whether proper procedures were followed in leasing or allocating space at Laksala to a private operator. Experts point out that under the government’s Procurement Guidelines (2006), an open tender and evaluation process is mandatory. Available information suggests that such a process was not conducted, raising suspicions of potential corruption.

Industry experts in the handicraft sector have therefore urged government authorities to intervene immediately to halt what they describe as a highly detrimental and irregular initiative.

Commentators further note that it is unsurprising for a politician such as Prasanna Ranaweera to have pursued such a deal, given the transactional nature of past arrangements. However, they express astonishment that figures such as Minister Sunil Handunnetti and Deputy Minister Chaturanga Abeysinghe—who came to power pledging to reject such questionable dealings—appear to have supported this endeavour.

Observers note that had this project been initiated during Ranaweera’s tenure, those same politicians would likely have vocally opposed it.

This situation, critics argue, raises the broader question of whether actions once condemned as improper are now being quietly redefined as acceptable. It remains the responsibility of the country’s leaders to assure the public that this is not the case.

By: Staff Writer

November 11, Colombo (LNW): Nearly three years after Sri Lanka and India agreed to jointly develop the historic Trincomalee oil tank farm, the project remains largely stagnant, highlighting the government’s lack of urgency in tapping one of the country’s most valuable strategic assets.

Under the quadripartite agreement signed on 6 January 2022 between the Government of Sri Lanka, the Ceylon Petroleum Corporation (CPC), Lanka Indian Oil Corporation (LIOC), and Trinco Petroleum Terminal (Pvt) Ltd (TPTL), the partners were granted 50 years to take custody, develop, and use the vast tank farm located in China Bay, Trincomalee.

The arrangement was intended to transform the 99-tank facility built by the British during World War II into a major regional petroleum storage and export hub. TPTL was authorised to engage in businesses such as petroleum storage, trading, and export of stored products, in a move expected to boost foreign exchange earnings and strengthen Sri Lanka’s energy security.

However, despite the grand vision and strategic location of the facility, actual progress has been dismal. Although a detailed development plan was drawn up soon after the agreement, it has not been implemented due to the lack of a reliable financing source. The government and its partners have also failed to finalise a formal agreement on the use of shared infrastructure such as jetties, pipelines, and other common facilities effectively paralysing even preliminary operations.

According to official sources, while TPTL was expected to rehabilitate at least a cluster of tanks and begin limited storage operations by 2024, work on the ground has barely begun. Only a few tanks have been earmarked for refurbishment, and bureaucratic indecision continues to stall progress. Despite repeated government assurances that the Trincomalee project is a national priority, the absence of funding, coordination, and leadership has left the project in limbo.

The potential of the tank farm remains immense. Trincomalee’s deep-water harbour is one of the finest in the region, ideally suited for oil storage and bunkering operations. A fully functional tank farm could make Sri Lanka a key petroleum logistics hub in the Indian Ocean, creating jobs, attracting foreign investment, and earning valuable foreign currency through exports.
Yet, the government’s passive approach and inability to convert policy into action risk turning this vital national asset into another missed opportunity. The Trincomalee oil tank farm could have been a cornerstone of Sri Lanka’s energy security and regional trade ambitions. Instead, it now stands as a symbol of bureaucratic inertia and short-sighted governance a project with vast potential, but little political will to see it through