By: Staff Writer

November 06, Colombo (LNW): The International Chamber of Commerce Sri Lanka (ICCSL) and the Rakita Keerthisena Management Trust (RKMT) have unveiled a forward-looking set of proposals for Budget 2026, calling for a smarter, technology-driven and fairer tax regime to strengthen Sri Lanka’s revenue base without burdening honest taxpayers.

In what they describe as “a blueprint for smarter revenue mobilisation,” the proposals urge policymakers to replace outdated systems with digital tools that promote transparency, simplicity and trust the cornerstones of a modern tax culture.

Rewarding Digital Transformation

The first proposal introduces a two-year tax credit of up to 25% for companies, especially small and medium enterprises (SMEs), investing in e-invoicing, ERP systems, and certified accounting software and cybersecurity tools. The initiative seeks to accelerate digital adoption and improve tax accuracy through real-time reporting and digital audits.

“Every rupee spent on digital compliance is an investment in national integrity,” RKMT emphasised, noting that this incentive would help reduce manual processes and bridge the trust gap between taxpayers and administrators.

Simplified Tax for the Service Economy

Acknowledging the rapid rise of Sri Lanka’s freelance, IT, consulting and creative sectors, RKMT has proposed a Simplified Service Economy Tax Framework to make compliance easier and less intimidating.

Under the proposal, individuals or small firms earning below Rs. 20 million a year could voluntarily register and pay a flat presumptive tax rate of 3–5% on gross receipts. Automatic tax withholding through banks and digital payment platforms would further streamline the process.

This simplified model is expected to widen the tax base, reduce enforcement costs, and level the playing field between formal and informal businesses while recognising the growing importance of digital professionals to the national economy.

Transparency through Integration

The third proposal focuses on transforming tax administration via an Integrated Taxpayer Record Tracking Dashboard a unified, digital interface that provides real-time visibility of a taxpayer’s registration, filings, payments, audits and refunds.

By connecting with national databases, the system aims to eliminate duplication, improve accuracy, and cut through the bureaucracy that frustrates taxpayers. “Transparency is not only about accountability; it’s about restoring trust,” the proposal notes.

Beyond Technical Reforms

The RKMT stressed that these measures represent more than administrative fixes they signal a cultural shift toward voluntary compliance through clarity, not coercion.

ICCSL confirmed that the International Chamber of Commerce (ICC) in Paris has pledged its support to assist Sri Lanka’s Government in implementing these digitalisation efforts.

As Sri Lanka continues its fiscal recovery, RKMT urges the Ministry of Finance and the Inland Revenue Department to adopt a long-term approach focused on trust, efficiency and inclusion.

“Sri Lanka’s next economic leap will not come from more taxes it will come from better taxation,” RKMT concluded. “We stand ready to support a 2026 Budget that is fair, forward-looking, and empowering for every honest taxpayer.”

By: Staff Writer

November 06, Colombo (LNW): The UK Trade Envoy for Sri Lanka, Lord John Hannett, has issued a strong endorsement of Sri Lanka’s tourism sector and its potential as a major global travel destination. Speaking at the launch of the Sri Lanka Pavilion at the World Travel Market (WTM) in London’s Excel Centre, Lord Hannett praised the island’s “story of strength and renewal” while underlining the UK’s intention to deepen trade and tourism ties with Sri Lanka.

In his address, Lord Hannett lauded the resilience, beauty and increasing appeal of Sri Lanka’s tourist offering. “You are not only promoting travel you are promoting understanding, helping communities thrive, and showing the world that Sri Lanka has an awful lot to offer,” he said. He noted the UK remains one of the top source markets for Sri Lanka, reflecting longstanding British affinity for the island.

He described his visit to Sri Lanka as inspiring: “I was moved by the optimism and passion of Sri Lankans, particularly among entrepreneurs driving the country’s post-crisis recovery.” He also stressed that tourism is far more than a revenue stream; it is “a bridge between different cultures.”

Lord Hannett highlighted ongoing UK–Sri Lanka collaborative initiatives, such as the Developing Countries Trading Scheme and the Ocean Country Partnership Programme, which support Sri Lanka’s blue economy tackling marine pollution, promoting sustainable seafood practices and conserving marine biodiversity. He said Sri Lanka has been identified among the world’s 36 global tourism hotspots for its beaches and water sports, and that the partnership is now “unlocking new opportunities for sustainable growth and shared prosperity”.

He also recognised the UK-based Sri Lankan diaspora’s vital role in nurturing bilateral ties across business, academia and health-care, noting that thousands of Sri Lankan students study in the UK each year, forging strong people-to-people connections. “The relationship between our two countries is rooted in history but defined by the future, one built on shared values and global ambitions. From eco-tourism to digital innovation, from education to enterprise, the UK and Sri Lanka are building a partnership of opportunity,” he added.

His remarks come at a time when Sri Lanka’s tourism sector is showing clear signs of resurgence. According to the Sri Lanka Tourism Development Authority (SLTDA), the country had welcomed over 1.7 million international tourists during the first nine months of 2025 a year-on-year increase of more than 16 %.

Tourism earnings likewise surpassed US$2 billion in the first seven months of the year. Key source markets include India (the largest), the UK, Russia, China and Germany.

Despite the encouraging numbers, industry watchers caution that accelerating growth must be matched with investment in infrastructure, service quality and sustainable practices to ensure long-term success. Sri Lanka is leveraging wider marketing campaigns, visa facilitation and improved air connectivity to turn its recovery into lasting momentum.

With Lord Hannett’s endorsement and the UK’s partnering support, Sri Lanka’s tourism sector appears poised for its next chapter. The challenge now lies in converting global attention and rising visitor numbers into broad-based socio-economic benefits for the island nation.

By: Staff Writer

November 06, Colombo (LNW): The Ceylon Institute of Builders (CIOB) has submitted its 2026/2027 Sri Lankan Construction Industry Budget Proposal to the Ministry of Construction, in a high-level ceremony attended by the Minister, Deputy Minister and the Secretary of the Ministry. The document lays out a sweeping roadmap to reinvigorate Sri Lanka’s construction industry positioning it as a linchpin of national economic growth once again.

According to the proposal, the industry has endured six consecutive years of stagnation and liquidity stress. CIOB argues urgent policy intervention and financial relief are necessary to reverse that trend. The roadmap sets out an ambitious target: restore the sector’s contribution to roughly 10 % of GDP, with a target industry turnover of LKR 2.97 trillion (about US$9.89 billion).

Key pillars of the plan include restarting stalled infrastructure projects (roads, hospitals, housing), rebuilding SME contractor capacity (noting a current 40 % SME failure rate), the creation of an Infrastructure Fund, concessional loan schemes (interest at or below 6 %), and encouraging exports and foreign investment via an international construction investor forum. The proposal also emphasises local material production, digitalisation of SMEs, and strong governance via formation of a National Steering Committee and an independent Programme Management Unit. CIOB President Dr. Rohan Karunaratne stated: “The construction sector is the engine that keeps Sri Lanka moving. This proposal offers a clear path to rebuild confidence, create jobs, and deliver long-term value to the economy.”

The timing of the submission aligns with signs of renewed strength in the construction sector. According to official data, the sector expanded by 8.5 % in the quarter ended June 2025, bringing first-half growth to 9.6 % year-on-year.

The sector’s purchasing-managers index (PMI) reached 67.6 in September 2025, the strongest reading since late 2021, highlighting increased new orders, employment and purchases in the industry.

CIOB’s plan seeks to harness that momentum to drive a broader recovery.However, the proposal underscores that without targeted relief and policy changes, the sector risks faltering again. SMEs, which form a key part of the contractor base, remain vulnerable.

The proposal warns that failure to implement change will blunt job creation (targeting over 1.5 million direct jobs and safeguarding 20,000 existing ones) and hamper the revival of stalled infrastructure.

The document estimates that if adopted, the plan could complete 60 % of currently stalled projects, revive approximately 3,000 SMEs and strengthen Sri Lanka’s export capacity in construction services.

The CIOB’s agenda asks the government to formally recognise the construction industry as a “priority crisis-hit sector,” so that emergency financial support and implementation of Cabinet-approved relief can take place.

With public allocation in the 2025 budget reaching LKR 1.3 trillion for public investment, the industry sees an opportunity but also warns the gap between allocated funds and project execution remains a major challenge.

As Sri Lanka seeks to rebuild after recent economic headwinds and position infrastructure development at the heart of recovery, the CIOB’s proposal offers a structured blueprint. Yet the crucial question remains: will policy makers act swiftly and decisively enough for the construction sector’s recovery to deliver broad-based economic benefits?

By: Staff Writer

November 06, Colombo (LNW): The Planters’ Association of Ceylon (PA) is sounding the alarm over Sri Lanka’s continued ban on oil-palm cultivation, warning that each day the prohibition remains, the nation bleeds yet more foreign exchange and misses out on vital economic opportunity. The association estimates that between 2021 and 2025, Sri Lanka spent over US$175 million on imported edible oils after cultivation was prohibited in April 2021.

Once a cornerstone of crop-diversification strategy, oil-palm cultivation had been firmly backed by government policy in the early 2000s. Introduced in 1968, the crop took off when Regional Plantation Companies (RPCs) began seeking alternatives to loss-making rubber. By 2009, tax breaks for hybrid seed imports were in place, and by 2016 the state formally approved expansion to some 20,000 hectares, prioritising degraded rubber lands.

Yet the policy about-face in 2021 devastated the sector. With the ban on new cultivation and crude palm oil imports, local production collapsed, forcing edible-oil demand of some 264,000 metric tonnes annually to be met almost entirely by imports. The PA estimates that Sri Lanka now spends roughly US$35 million each year to plug the shortfall.

Investment in the sector had already been substantial — the total oil-palm sector investment exceeded Rs 23 billion, and seedlings valued at over Rs 550 million had to be written off when plantings were abandoned.

The economic impact ripples through the broader plantation and food‐processing industries. The sector once provided Rs 2.5 billion annually into rural households and sustained over 5,000 direct jobs and some 21,000 dependent livelihoods.

With the ban in place, these communities face an acute income decline. Meanwhile, downstream industries including bakery and confectionery (valued at over Rs 200 billion) cite rising input costs and supply disruptions of edible fats such as margarine and cooking oil.

From a productivity standpoint, oil-palm offers a compelling case: yields of three to eight times more oil per hectare compared to crops like coconut or soybean, on less land and with lower input costs. Plantation firms argue that, had policy remained consistent, Sri Lanka might have achieved near self-sufficiency in edible oils, saved billions in imports, and created new rural employment.

Environmental concerns have been cited in support of the ban a 2018 expert panel recommended phasing out the crop over ten years, citing soil erosion and water-source threats.

But the PA counters that Sri Lankan oil-palm expansion was restricted to old rubber lands, not virgin forests, and that global exemplars such as Malaysia and Indonesia manage palm oil under strict sustainability standards such as RSPO and MSPO.

With Sri Lanka’s foreign-exchange reserves under severe pressure and the plantation sector faltering, the association is calling for a pragmatic policy reset: lifting the ban, adopting certified sustainable palm-oil practices, integrating smallholders, reforming import-tax regimes and investing in R&D and traceability. “Every day the ban remains in place, the country loses money, opportunities and credibility,” says PA Secretary-General Lalith Obeyesekere.

Ultimately, the case for oil‐palm is not just economic but strategic: reviving a forward-looking plantation sector that bolsters food security, generates employment and conserves foreign exchange. The question now is whether policy will pivot quickly enough to salvage the lost ground and avoid further fiscal leakage in an already fragile economy.