By: Staff Writer

November 11, Colombo (LNW): The Joint Apparel Association Forum (JAAF), representing Sri Lanka’s largest industrial export sector, yesterday commended the 2026 Budget for its strong focus on export-led growth, investment facilitation, and macroeconomic stability, while urging the Government to ensure consistent and transparent implementation of announced reforms.

In a statement, JAAF welcomed the Government’s renewed commitment to strengthening the external sector and rebuilding investor confidence, describing the Budget’s direction as a “positive signal” for the country’s economic recovery. The industry body noted that while the proposals outlined promising initiatives to enhance competitiveness, long-term success would depend on sustained execution and policy coherence.

The apparel industry accounting for the bulk of Sri Lanka’s manufacturing exports—viewed the Budget’s focus on digitalisation, trade facilitation, and capital allowances as particularly beneficial. These measures, JAAF said, could help attract fresh foreign investment, improve efficiency, and position Sri Lanka more competitively within global value chains.

Among the most welcomed reforms were the planned restructuring of the Department of Inland Revenue, the introduction of the next phase of the Revenue Administration Management Information System (RAMIS 3.0), and the rollout of e-invoicing. The industry has been advocating these changes to streamline tax administration, improve compliance, and reduce inefficiencies as the country transitions away from the long-standing Simplified Value Added Tax (SVAT) system.

JAAF Secretary General Yohan Lawrence cautioned that the positive intentions of the 2026 Budget must be matched by steady and predictable implementation. “The Budget demonstrates encouraging intent to build a stronger export economy, but consistency and clarity in policy execution are what ultimately drive confidence,” he said.

“The apparel sector operates in an intensely competitive global environment where even minor disruptions can have a ripple effect across thousands of jobs and livelihoods. We urge the authorities to maintain open and continuous dialogue with the private sector to ensure that reforms are implemented with minimal friction.”

JAAF also stressed the need for policy alignment with global sustainability and market access standards, especially under key preferential trade arrangements. It highlighted that stable and affordable energy costs, a clear pathway for renewable energy adoption, and improved logistics infrastructure were essential for sustaining export growth.

Reiterating its readiness to collaborate with the Government, JAAF called for a unified national export strategy that integrates the interests of large industries, small and medium enterprises, and the broader workforce. Such a coordinated approach, the association emphasized, would strengthen Sri Lanka’s competitiveness and accelerate its path toward a resilient and inclusive economic recovery.

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.