Minister Anura Karunathilake informed Parliament yesterday (August 5) that the President’s Fund had been misused by former Ministers and Members of Parliament to provide financial support for the overseas education of their children, relatives, and associates.

According to the Minister, between 2005 and 2014, substantial amounts of public funds were allocated to finance PhDs and other higher education programmes abroad, under the condition that recipients would return to Sri Lanka and serve the nation. However, no records exist at the Presidential Secretariat to confirm that any of these beneficiaries returned to fulfil that obligation.

“Information is lacking regarding the specific conditions under which these funds were disbursed,” Minister Karunathilake told the House, responding to a question raised by NPP MP Ravindra Bandara.

The Minister went on to name several individuals who allegedly benefitted from these allocations:

• Harshana Supun Rajakaruna, son of former Gampaha District MP Sarath Chandra Rajakaruna
• I.N. Kodituwakku, a relative of former Colombo District MP Karunasena Kodituwakku (2006)
• K. Radhakrishnan, a relative of former National List MP V. Radhakrishnan (2006)
• Dinesh Dodangoda, reportedly through political affiliation (2006)
• K.K. Paranavithana (2006)

The Minister revealed that the total amount disbursed for foreign scholarships from the President’s Fund between 2005 and 2014 was over Rs. 192.7 million.

Breakdown by year:

• 2005 – over Rs. 73 million
• 2006 – over Rs. 65 million
• 2007 – over Rs. 33 million for 42 individuals
• 2008 – over Rs. 11 million for 18 individuals
• 2009 – over Rs. 3 million for 4 individuals
• 2010 – over Rs. 3 million for 3 individuals
• 2011 – over Rs. 1 million for 2 individuals
• 2012 – over Rs. 3 million for 2 individuals
• 2014 – over Rs. 700,000 for 1 individual

Minister Karunathilake stressed that there is no evidence that these funds have been recovered or that recipients met the conditions tied to the scholarships. “After reviewing the financial records, it is clear that these disbursements were made without adequate oversight or accountability,” he stated.

The Government has decided to reduce the insurance coverage for Members of Parliament from Rs. 1 million to Rs. 250,000, effective from the insurance year commencing October 9, 2025, Cabinet Spokesman and Mass Media Minister Dr. Nalinda Jayatissa announced.

Speaking at the weekly Cabinet media briefing held yesterday (August 5), Dr. Jayatissa said the proposal follows a recommendation made by President Anura Kumara Dissanayake during the 2025 Budget speech, which called for a reduction in MPs’ insurance benefits.

He noted that a group insurance policy with a maximum annual coverage of Rs. 1 million per MP had been implemented following Cabinet approval on May 15, 2023. However, in line with the President’s directive to rationalise public expenditure, the benefit will now be limited to Rs. 250,000 per MP per insurance year.

The Cabinet of Ministers has approved the proposal presented by the Minister of Public Security and Parliamentary Affairs to enforce this change.

Dr. Jayatissa also revealed that the existing insurance service provider will be discontinued, and a new insurance provider will be selected through an open process among interested institutions to implement the revised policy.

In a move aimed at enhancing taxpayer compliance and easing the digital filing process, Sri Lanka’s Inland Revenue Department (IRD) has extended the validity period of Personal Identification Numbers (PINs) issued to taxpayers until 30 November 2025. This extension is part of ongoing efforts to digitize tax administration and improve revenue collection amid growing fiscal challenges.

The decision, announced by the IRD in a statement issued on 31 July, applies to individuals, partnerships, and corporate entities required to file tax returns for the 2024/2025 year of assessment. The PIN acts as a critical access key to the Revenue Administration Management Information System (RAMIS)—the IRD’s digital platform for filing returns, making payments, and communicating with tax authorities.

Apart from individual taxpayers, the same PIN grants access to the Authorisation of Staff/Tax Agent portal, allowing companies and partnerships, both resident and non-resident, to authorise employees or agents through Staff Identification Numbers (SSID) to file returns on their behalf.

The IRD reiterated that filing tax returns online is compulsory for all taxpayers under Section 113 of the Inland Revenue Act No. 24 of 2017. This includes those required to submit Simplified Individual Income Tax Returns, standard Individual Returns, Partnership Income Tax Returns, and returns for Resident and Non-Resident Companies and Corporations.

 Taxpayers who have lost their PINs are advised to request a new one using the e-Services feature on the IRD’s official website.

Despite progress in digitalization, the IRD faces considerable challenges in broadening the country’s tax base. Although around 10 million Taxpayer Identification Numbers (TINs) have been issued, IRD officials estimate that only 1.7 to 1.8 million of those belong to adults over 18 who are active in the tax system—highlighting a significant gap in compliance. Since January 2024, it has been mandatory for all adults above 18 to register for TINs in an effort to bring more individuals into the formal tax net.

In its 2024 performance report, the IRD said it had collected 95% of its Rs. 1.07 trillion income tax target, contributing to 39% of total government revenue, while VAT accounted for 50%. However, concerns remain about the department’s ability to meet the 2025 revenue target of Rs. 2,195 billion.

The International Monetary Fund (IMF), in its July 2025 review, stressed that sustained revenue mobilisation is essential to ensure fiscal stability. It called for improvements in tax compliance, tightening tax exemptions, and public financial management, along with better targeting of social support measures to safeguard vulnerable communities.

Sri Lanka is now charging all taxes on foreign parcels coming from online platforms and backlogs have also been cleared, without any de minimis exemptions being given Customs officials said.

“We have cleared all the backlogs,” Additional Customs Director General, Seevali Arukgoda told the parliament’s Committee on Public Finance.

“At the moment individual items are charged on the HS Code. We gave technical advice to the companies that are importing. Now they are being cleared daily.

Before the crisis about 1 to 2 billion rupees of revenues was earned and about 4 to 5 tonnes arrived daily, another customs official said.

Daily shipments have stopped and now shipments are coming weekly about three times, he said.“They have minimized costs and changed their strategies,” the person said.He said there the backlog was partly due to a delay in the relevant companies getting approval from their platforms to pay the higher taxes.

Platforms like AliExpress which stopped low cost shipping to Sri Lanka after the change in customs procedure and the cost of shipping a key cap to Sri Lanka was listed at over 17,000 rupees as of August 05.

COPF Chair Harsha de Silva questioned what happened to the de minimis exemption given by then Finance Minister Mangala Samaraweera.The gazette indicated only an exemption for trade samples, Arukgoda said.

Under de minimis exemption most well governed countries in Europe and East Asia where people have high levels of economic freedoms and innovation de minimis exemptions of 100 to 150 dollars (or Euro) are given.

Under de minimis exemption, all taxes border taxes are exempted. Value added tax is charged in most contries.The US had the highest de minimis exemption of 800 dollars, which President Donald Trump removed amid growing economic nationalism in the country and also hiked import duties in the hope of ending trade deficits, which is an outcome of heavy inward investments into the US.

Since de minimis is an established practice internationally Sri Lanka should also consider an exemption, de Silva said.That is a government policy decision, Arukgoda said.

A committee appointed by President Anura Kumara Dissanayake is looking into the matter and a decision will be taken in the future, Deputy Industries Minister Chathuranga Abeysinghe said.

Sri Lanka’s electric vehicle market has been jolted by a major controversy involving a large consignment of BYD electric vehicles, amid accusations of underreporting motor capacity to evade import duties. Over 1,000 brand-new BYD electric vehicles, currently held at the Colombo Port, are under investigation after Customs authorities raised red flags over discrepancies in motor power ratings. The issue has now sparked confusion among buyers, with questions emerging over tax liabilities, software tampering, and the legality of the imports.

At the heart of the issue is the allegation that the vehicles were declared as having 100-kilowatt (kW) motors—qualifying them for a lower tax bracket—when in reality, they may be equipped with 150 kW motors. This discrepancy significantly affects the import duty calculation, raising concerns of large-scale tax evasion and consumer deception.

Minister of Labour and Deputy Minister of Economic Development Anil Jayantha, addressing the matter during a televised interview, confirmed that the inconsistency came to light following complaints from used vehicle importers. “They pointed out that used vehicles must declare the true motor capacity—often 150 kW—resulting in higher tax. But these brand-new BYD vehicles were cleared on the basis of 100 kW documentation,” he said.

Jayantha said he was presented with both sets of documents and subsequently engaged in discussions with Sri Lanka Customs. The minister noted that an investigation is underway to determine if the actual motor capacity was masked through software or misrepresented through forged documents.

“Tax is imposed based on motor capacity, not output,” he said. “There are serious concerns about whether the software was used to limit motor performance or if the documentation was falsified. Customs will conduct technical verification.”

The controversy has also sparked anxiety among customers who pre-ordered these vehicles. Jayantha acknowledged this and said that in certain cases, financial institutions may recover payments through bank guarantees—if wrongdoing is proven. However, he cautioned that there is no guarantee the importing company will extend such protections to buyers.

Adding to the complexity, Jayantha stated that Customs can review previously cleared shipments for similar discrepancies. “If any violations are found, the importer—not the customer—will be held liable for penalties and unpaid taxes,” he clarified.

As investigations unfold, the case has raised broader questions about transparency in EV imports and the need for stricter verification processes to protect both state revenue and unsuspecting consumers from potential fraud.

Sri Lanka is launching an ambitious vocational training program targeting prison inmates, marking a transformative shift in the country’s correctional strategy from punishment to rehabilitation. With a budget allocation of Rs. 100 million (approximately USD 330,000), the initiative is designed to equip prisoners with practical skills, paving the way for their reintegration into society after completing their sentences.

The program, announced by Jagath Weerasinghe, spokesperson for the Department of Prisons, represents the first nationwide effort of its kind. “This is a major step forward in reforming our correctional system,” Weerasinghe said. “The goal is not just to punish, but to give inmates the tools to rebuild their lives once they’re released.”

Sri Lanka’s 36 prisons currently house around 34,000 inmates, a significant proportion of whom are incarcerated for drug-related offenses. The new training program will offer instruction in carpentry, plumbing, agriculture, tailoring, and information technology—skills that are in high demand in both local and international markets.

Authorities believe the initiative will not only provide inmates with marketable skills but also contribute to better prison discipline and lower repeat offending rates by instilling a sense of purpose and hope. Collaboration with private sector companies and NGOs is also in the pipeline, aimed at facilitating job placements and mentorship opportunities for inmates once they are released.

“This represents a shift from a punitive approach to a rehabilitative one,” Weerasinghe added. “We hope it will act as a model for broader reforms across the criminal justice system.” The program will be piloted in select prisons later this year, with plans for expansion based on its impact and demand.

One such example of successful collaboration already in motion is the partnership between the Prisons Department and P.G. Martin Industries (Pvt) Ltd—a local footwear and leather goods manufacturer. Chairman and Managing Director P.G.D. Nimalasiri, a former President of the Sri Lanka Footwear and Leather Products Manufacturers Association, said that his company has been involved in vocational training for prisoners since 2016.

Currently, around 40 inmates at Welikada Prison in Colombo are participating in a six-month training program provided by senior craftsmen from the company. “We are not just teaching them a skill; we are helping them build a future,” Nimalasiri stated. “They learn the entire manufacturing process and, upon completion, begin earning a monthly remuneration. This isn’t charity—it’s recognition of their effort and commitment.”

Nimalasiri also emphasized the urgent need for skilled and unskilled labor in industries like leather production, where workforce shortages persist despite high national unemployment. He advocates for greater investment in AI, training, and upskilling across the sector.

The prison vocational training program is thus not only a progressive step in criminal justice reform but also a potential solution to the country’s skilled labor shortages. By offering inmates a second chance and addressing workforce gaps, the initiative holds promise for long-term social and economic impact.

Several spells of showers will occur in Western, Sabaragamuwa, Central and North-Western provinces and in Galle and Matara districts.

Showers or thundershowers will occur at a few places in Uva and Eastern provinces after 1.00 p.m.

The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

August 05, Colombo (LNW): In a significant gesture of solidarity, the Chinese government has extended a major humanitarian donation to Sri Lanka to assist in ongoing efforts to support communities affected by recent flooding across the country.

The aid package, valued at approximately Rs. 400 million, was formally handed over at a ceremony held in Colombo.

The contribution, delivered through the China Aid programme, includes an extensive range of emergency relief supplies such as tent kits, portable generators, water pumps, blankets, and other essential items designed to improve the immediate living conditions of those displaced or impacted by the severe weather.

The official handover took place in the presence of Chinese Ambassador Qi Zhenhong and Sri Lanka’s Secretary to the Ministry of Defence, Air Vice Marshal (Retired) Sampath Thuyacontha. The event served as a symbol of the continuing diplomatic partnership and humanitarian cooperation between the two nations.

Ambassador Qi, speaking at the ceremony, highlighted China’s readiness not only to provide material support but also to share technical knowledge in disaster preparedness, early warning systems, and climate monitoring. He expressed hope for future collaboration in these areas, particularly as natural disasters become more frequent and severe due to changing climate patterns.

Defence Secretary Thuyacontha, receiving the consignment on behalf of the Sri Lankan government, conveyed appreciation for the timely assistance. He remarked that the aid, amounting to 10 million yuan in value, arrives at a critical moment when the country is grappling with the aftermath of widespread flooding and landslides triggered by seasonal rains.

The relief materials are set to be distributed by the National Disaster Relief Services Centre in coordination with local district secretariats. Authorities have pledged that the aid will be delivered promptly to communities in need, especially in the most severely affected regions, where homes, infrastructure, and livelihoods have been heavily disrupted.

August 05, Colombo (LNW): A new set of criminal charges has been brought before the Colombo High Court against five individuals, including a widely known underworld suspect, over an alleged plan to flee custody while being held by the Criminal Investigation Department (CID).

The indictment, filed by the Attorney General, accuses the group of conspiring to orchestrate the escape while under state detention.

Among the accused is Nandun Chinthaka Wickramaratne, more commonly known by his alias Harak Kata, who has long been linked to organised criminal activity.

Also named in the indictment are Ravindu Sandeepa Gunasekara, a former police constable attached to the CID, along with Dinesh Tharanga, Ruwan Chamara—also known as Midigama Ruwan—and Sanjeewa Abeysinghe.

The case was taken up before High Court Judge Sujeewa Nishshanka, during which the charges were formally read in open court. The judge ordered that all five defendants have their fingerprints officially recorded as part of the ongoing proceedings. The matter has been fixed for further hearing on September 24.

This is not the first time Harak Kata has faced prosecution. He had previously been indicted alongside two other individuals in a separate case. However, State Counsel Sajith Bandara, appearing on behalf of the prosecution, requested that the earlier indictment be withdrawn due to pending appeals lodged by the accused at the Court of Appeal.

Judge Nishshanka noted that any further action on the previous case would be contingent on the withdrawal of those appeals. Legal counsel representing the defendants informed the court that they intend to file a motion to formally discontinue the appeals in question.