July 22, Colombo (LNW): Showers will occur at times in the Western, Sabaragamuwa and Central provinces and in Galle and Matara districts, with fairly heavy falls about 75 mm likely at some places in the Sabaragamuwa province and in Nuwara-Eliya, Kandy, Galle, Matara and Kaluthara districts, the Department of Meteorology said in its daily weather forecast today (22).
Several spells of showers may occur in the North-western and Northern provinces and in Hambantota district.
Strong winds of about (55-60) kmph can be expected at times over Western slopes of the central hills and in Northern, North-central, North-western, Central, Southern and Sabaragamuwa provinces and Trincomalee district.
Fairly strong winds about (40-50) kmph can be expected at times elsewhere.
The general public is kindly requested to take adequate precautions to minimise damages caused by strong winds.
Marine Weather:
Condition of Rain: Showers will occur at times in the sea areas off the coast extending from Puttalam to Matara via Colombo and Galle.
Winds: Winds will be Westerly to South-westerly and wind speed will be (35-45) kmph.
Wind speed can increase up to (60-70) kmph at times in the sea areas off the coast extending from Chilaw to Mannar via Puttalam and from Galle to Pottuvil via Hambantota.
Wind speed can increase up to (50-60) kmph at times in the sea areas off the coast extending Chilaw to Galle via Colombo and from Mannar to Vakarai via Kankasanthurai and Trincomalee.
State of Sea: The sea areas off the coast extending from Chilaw to Mannar via Puttalam and from Galle to Pottuvil via Hambantota will be rough or very rough at times. Naval and fishing communities are advised not to venture into these sea areas for next 24 hours.
The sea areas off the coast extending from Chilaw to Galle via Colombo and from Mannar to Vakarai via Kankasanthurai and Trincomalee may be fairly rough to rough at times.
The wave height (about 2.5 – 3.0 m) may increase in the sea areas off the coast extending from Puttalam to Pottuvil via Colombo, Galle and Hambantota. Therefore, there is a possibility that nearshore sea areas extending from Puttalam to Pottuvil via Colombo, Galle and Hambantota may experience surges due to sea waves.
Naval and fishing communities are requested to be attentive to future forecasts issued by the Department of Meteorology in this regard.
July 21, Colombo (LNW): In a move that has sparked concerns in New Delhi, Sri Lanka is preparing to terminate a key energy agreement with India’s Petronet LNG Ltd. (PLL), citing misalignment with national priorities and mounting geopolitical pressures. The decision, influenced by growing Chinese inroads into Sri Lanka’s energy sector and earlier U.S.-brokered involvement, has raised eyebrows across South Asia.
The controversial decision targets the Memorandum of Understanding (MoU) signed between Petronet LNG and Sri Lanka’s LTL Holdings on August 20, 2024, for the development of Liquefied Natural Gas (LNG) supply infrastructure.
The agreement was part of a broader Indian initiative, announced by Prime Minister Narendra Modi, to support Sri Lanka with LNG supplies, interconnect the two countries’ power grids, and construct a petroleum pipeline — part of New Delhi’s strategic energy diplomacy in the Indian Ocean region.
However, Sri Lanka’s Ministry of Energy has formally sought Cabinet approval to cancel the MoU. Officials say the Indian proposal — involving the transport of LNG via ISO tank containers from PLL’s Kochi terminal to power plants in Kerawalapitiya — does not align with immediate energy needs due to issues of scalability and timing.
The ministry contends that the Indian LNG plan overlaps with a parallel and already-awarded Chinese-led LNG infrastructure project. The Chinese venture includes the development of an LNG terminal and pipeline network, intensifying the regional competition between Beijing and New Delhi for strategic influence in Sri Lanka’s critical infrastructure.
Energy Secretary Udayanga Hemapala confirmed that Cabinet approval for the Petronet deal’s cancellation is expected soon. He also assured that Indian firms, including Petronet, will still be allowed to bid for future LNG supply tenders under a competitive and transparent process once the necessary infrastructure is in place.
This isn’t the first time foreign involvement in Sri Lanka’s LNG sector has raised eyebrows. In 2021, U.S.-based New Fortress Energy (NFE) struck a deal with the former Sri Lankan government to develop an offshore LNG terminal near Colombo.
Despite local opposition and legal challenges — notably from CEB engineers concerned about the lack of a competitive bidding process — the project was greenlit after the court dismissed all petitions in March 2022.
NFE was granted rights to supply gas to both the existing Yugadanavi Power Plant and the planned Sobadhanavi facility, with expectations to deliver over 1.2 million gallons of LNG daily. Former U.S. Ambassador Alaina B. Teplitz had played a key role in facilitating the deal, describing it as a private investment bringing cleaner, more affordable energy — and distancing it from debt-driven models.
Critics argue that the Sri Lankan government’s LNG decisions have become a geopolitical chessboard for the U.S., China, and India. What was initially seen as India’s opportunity to balance China’s dominance is now unraveling, with Colombo caught in a strategic tug-of-war.
As Sri Lanka grapples with chronic energy shortages and its fragile post-crisis economy, decisions over critical infrastructure are increasingly dictated not just by domestic necessity, but by external power plays — leaving India to recalibrate its next move in the region.
July 21, Colombo (LNW): Government’s bid to increase revenue through taxing digital payments may clash with IMF policies and risk stifling innovation and digital entrepreneurship.
In a move that could have wide-reaching implications for Sri Lanka’s digital economy and international financial commitments, the government has announced plans to impose an 18% Value Added Tax (VAT) on foreign digital payment platforms such as PayPal, Stripe, and cryptocurrency exchanges, starting October 1.
The decision, unveiled through a Gazette notification, aims to expand the country’s tax net under the International Monetary Fund (IMF)-backed revenue reform agenda. However, the move has raised serious concerns over its economic impact, legality under IMF agreements, and implications for digital innovation and entrepreneurship.
Taxing the Digital Economy
The newly gazetted rules categorize financial technology platforms—including PayPal, Stripe, and crypto exchanges—as liable for VAT on services provided in Sri Lanka. The list also includes a broad range of foreign-supplied digital services such as cloud hosting, software-as-a-service (SaaS), digital advertising, e-commerce platforms, and streaming services.
While such taxation may seem like a progressive attempt to bring digital giants into the national tax framework, Sri Lanka’s move to tax financial services, particularly those that are exempt in well-regulated economies like the UK, EU, and Singapore, appears to be both abrupt and potentially counterproductive.
In many mature economies, financial services like PayPal are exempt from VAT due to the technical challenges in calculating value addition and to avoid cascading tax effects. For example, Singapore recognizes digital payment tokens as a medium of exchange and removed VAT (or GST) on them in 2020 to prevent double taxation and encourage innovation.
IMF Conflict & Risk of Multiple Currency Practices
Critically, this new tax regime may conflict with Sri Lanka’s commitments to the IMF. Under the ongoing Extended Fund Facility (EFF), Sri Lanka has agreed not to introduce or intensify Multiple Currency Practices (MCPs) or other exchange restrictions. The IMF has already flagged a 2.5% surcharge on foreign credit card transactions as a violation, albeit with a temporary waiver.
Analysts caution that layering an additional 18% VAT on PayPal and similar platforms—especially when these services are used to purchase VAT-liable goods or services—could result in total tax burdens of over 36%, due to cascading effects. If this taxation is processed through credit cards, the combined burden could violate Sri Lanka’s IMF performance criteria and affect future disbursements of IMF funding.
Cabinet Spokesman Dr. Nalinda Jayatissa responded to concerns by stating that a special committee has been appointed to review taxes on e-commerce platforms, and possible conflicts with international obligations will be evaluated.
Strangling Startups and Freelancers?
Beyond policy clashes, the 18% VAT could deal a blow to Sri Lanka’s burgeoning digital economy, especially freelancers, startups, and small online businesses. Many tech entrepreneurs rely on PayPal and Stripe to receive international payments, and taxing these platforms could reduce their competitiveness, increase operational costs, and even force some businesses to shut down.
Furthermore, these tax moves may discourage foreign clients from engaging with Sri Lankan service providers due to increased costs and tax complexity—undermining the government’s own digital economy goals.
A Pattern of Crisis-driven Taxation
Sri Lanka’s approach to taxation—especially during economic crises—has often been reactive rather than strategic. The country’s financial system has long operated under outdated frameworks and control-based policies such as forced forex conversions and surrender rules, imposed each time the Central Bank prints money and creates a balance of payments crisis. This pattern has historically led to forex shortages, rate hikes, and IMF bailouts.
Instead of pursuing long-term regulatory reform and economic stability, the government’s repeated reliance on patchwork tax policies erodes public confidence, investor trust, and institutional integrity.
Way Forward: Reform Over Reaction
Experts suggest that instead of hastily expanding VAT to new sectors, Sri Lanka should focus on modernizing its tax collection framework, ensuring consistency with global practices, and incentivizing digital growth. This includes aligning tax policies with IMF commitments, avoiding multiple currency practices, and ensuring that taxation does not penalize innovation or small entrepreneurs.
As global economies increasingly embrace fintech and digital assets, Sri Lanka risks falling further behind if taxation is used as a blunt instrument to patch budget deficits rather than build sustainable, forward-thinking policy.
Bottom Line:
The 18% VAT on PayPal, Stripe, and cryptocurrencies reflects the government’s urgency to expand revenue. However, unless handled with transparency, fairness, and strategic foresight, this tax could backfire—jeopardizing IMF support, choking digital entrepreneurship, and deepening economic uncertainty.
July 21, Colombo (LNW): The Catholic Church in Sri Lanka has formally distanced itself from a recent statement made by one of its clergy members calling for the death penalty to be imposed on a former senior police officer linked to failures surrounding the 2019 Easter Sunday bombings.
Fr. Cyril Gamini Fernando, Director of Communications for the Archdiocese of Colombo, addressed the matter publicly, stating that the comment in question—made by Fr. Jude Krishantha during a recent appearance—did not reflect the official stance of either the local Church or the global Catholic community.
“Fr. Jude has since clarified that he was speaking in a personal capacity, not on behalf of the Church. He has expressed regret over the misunderstanding, and we consider the matter resolved,” Fr. Fernando noted.
Fr. Krishantha’s comment had referred to the recently dismissed Deputy Inspector General of Police, Nilantha Jayawardene, whose removal was prompted by a Supreme Court decision and findings issued by the Presidential Commission of Inquiry into the Easter attacks.
Jayawardene had faced heavy criticism for alleged lapses in intelligence handling prior to the coordinated bombings that left over 250 people dead and hundreds injured.
While reaffirming the Church’s deep concern over the tragedy and its aftermath, Fr. Fernando was clear in reiterating the Church’s doctrinal opposition to capital punishment.
“The Catholic Church stands firmly against the death penalty, both here in Sri Lanka and globally. We believe in justice and accountability, but not through the taking of life,” he said.
He went on to emphasise the importance of fully implementing the recommendations made by the Presidential Commission.
“We hope that all recommendations are acted upon transparently and without delay, and that any further investigations bring clarity and closure to the affected families,” Fr. Fernando stated.
Addressing recent speculation in the media, Fr. Fernando also clarified that the Archbishop of Colombo had not requested the reinstatement of any specific officers, such as former CID Director Shani Abeysekera or former Public Security Secretary Ravi Seneviratne.
“What the Cardinal has called for is the restoration of all police officials who were removed in 2020, without singling out individuals by name,” he added.
July 21, Colombo (LNW): A high-value SUV has become the focus of an expanding investigation into suspected vehicle smuggling and document tampering, with links emerging between the families of two sitting Members of Parliament.
The vehicle in question, a luxury jeep believed to have entered Sri Lanka through illicit means, was reportedly registered under the name of Melanie Abeygunawardena, daughter of MP Rohitha Abeygunawardena.
According to official records, the jeep changed hands in October 2024, when it was sold to Rasika Buddhika Pinnagoda Withana, the son of opposition MP Jagath Withana.
The case has now drawn the attention of the Central Anti-Corruption Task Force, which suspects the jeep was smuggled into the country and then fraudulently entered into the Department of Motor Traffic (DMT) database. Investigators allege that the vehicle’s registration data may have been deliberately manipulated to obscure its true origins.
One point of contention is the discrepancy in the vehicle’s reported value. While MP Withana has publicly stated that his son purchased the SUV for Rs. 45 million, documents obtained during the investigation list the declared value as only Rs. 20 million—prompting further scrutiny over possible under-invoicing, tax evasion, or forgery.
The vehicle was recently seized by authorities in Matugama, where it was found in the possession of Withana’s son, who is currently in remand custody until August 01 by order of the Matugama Magistrate. A team of lawyers, including a President’s Counsel, appeared in court to represent him.
Meanwhile, law enforcement officials have been unable to locate Melanie Abeygunawardena for questioning. Despite repeated efforts, she remains uncontactable, and police say she could face arrest depending on the outcome of the ongoing inquiry.
MP Jagath Withana has maintained that his family was unaware of any irregularities associated with the vehicle at the time of purchase, stating that they believed it had been acquired through standard legal procedures.
July 21, Colombo (LNW): Three former senior officials, including ex-Cabinet Minister Mahindananda Aluthgamage, were formally indicted at the Colombo High Court today in connection with alleged misuse of public assets during the 2015 presidential election period.
The charges, filed under the Public Property Act, relate to the procurement and distribution of large quantities of carrom and draughts boards through the state-run retail chain Lanka Sathosa.
Also named in the indictment are Nalin Fernando, the former Chairman of Lanka Sathosa, and retired Major General Nanda Mallawarachchi, who served as Secretary to the Ministry of Sports at the time of the events in question.
The allegations centre on the use of government resources to secure political advantage by distributing sports equipment to local clubs in the run-up to the national poll.
Presiding over the hearing, High Court Judge Manjula Thilakaratne ordered that all three accused be granted bail. However, due to existing custodial sentences from a related corruption case, Aluthgamage and Fernando remain in prison and will be formally produced in court at the next hearing.
The backdrop to today’s proceedings includes a high-profile ruling delivered by the Colombo Permanent High Court Trial-at-Bar on May 29, in which both Aluthgamage and Fernando were convicted and sentenced to lengthy prison terms—20 and 25 years of rigorous imprisonment respectively.
That case, prosecuted by the Commission to Investigate Allegations of Bribery or Corruption, found the pair guilty of misappropriating over Rs. 53 million between September and December 2014.
The funds were allegedly used to import approximately 14,000 carrom boards and 11,000 draughts boards, which were then handed out to various sports organisations and clubs across the country.
Prosecutors contend the distribution was politically motivated, timed to coincide with the final months of the presidential campaign, and aimed at bolstering support for the ruling party at the time.
July 21, Colombo (LNW): The Inter-University Students’ Federation (IUSF) has strongly criticised what it describes as a covert attempt by the Government to fracture and discredit the student movement by installing politically affiliated individuals as campus leaders.
The student body alleges this is part of a broader agenda to soften resistance to the creeping privatisation of Sri Lanka’s public education system.
In a public statement issued on its verified social media platforms, the IUSF denounced the emergence of a separate student group that recently held a press conference claiming to be the official IUSF and announcing the appointment of a new convenor.
According to the IUSF, this new faction has adopted their insignia, logos, and even official letterheads, in what the Federation describes as a deliberate effort to confuse the student body and dilute opposition.
The situation escalated after the breakaway group also launched social media accounts purporting to represent the IUSF, further fuelling speculation about a politically motivated attempt to hijack the Federation’s identity and mission.
The IUSF’s leadership maintains that this development is not spontaneous, but rather orchestrated from above, accusing the Government of exploiting the student movement’s internal structures to push through controversial education reforms. The group claims the ultimate goal is to weaken public resistance to privatisation policies that many student activists have consistently opposed.
Calling for vigilance and unity, the IUSF urged students, academic staff, and the broader public to remain aware of what it described as state-sponsored misinformation campaigns.
The Federation reiterated its long-standing commitment to resisting commercialisation within the higher education sector and pledged to continue its activism against policies that, in its view, undermine the right to accessible education for all.
The IUSF also appealed for collective action to challenge what it sees as a broader attempt to suppress dissent and silence youth-led advocacy in the country.
July 21, Colombo (LNW): Sri Lanka’s rubber industry, a vital pillar of the nation’s export economy, is facing mounting challenges in sustaining its competitiveness in international markets, particularly the United States.
Once a robust contributor to export earnings, the industry is now grappling with the consequences of international tariff changes, rising global competition, and declining production volumes.
In 2024, Sri Lanka’s rubber industry experienced growth in export earnings, reaching US$ 1,001.54 million, a 7.66% increase compared to 2023. This growth was driven by increased exports of industrial and surgical gloves, as well as pneumatic and retreated rubber tires and tubes. The country’s total natural rubber production in 2024 was 69,185 MT. Sri Lanka is also a leading exporter of solid tyres and latex-based gloves.
Sri Lanka’s rubber exporters are voicing deep concern over the looming August 1 deadline for negotiations on tariffs imposed under the Trump administration, warning that failure to reach a more favorable agreement could result in the loss of the vital U.S. market.
Industry spokesperson Kamal Silva stressed the urgency of revising the current tariff regime, noting that Sri Lankan rubber products face a steep 30 percent U.S. import duty, rendering them uncompetitive against regional rivals like Indonesia. “Even before the new tariff rates, we were struggling to keep pace. A 15 percent tariff is ideal for Sri Lankan exporters to maintain a competitive edge,” Silva told PTI, adding that the sector generates approximately USD 300 million annually from U.S. exports alone.
The situation has been exacerbated by the preferential treatment given to Indonesia, which has secured lower tariffs and now holds a significant cost advantage. Dhammika Fernando, representing the Sri Lankan Free Trade Zone Exporters’ Association, acknowledged this disparity and expressed cautious optimism over ongoing discussions. “We’ve been informed that up to 1,600 goods and services might be granted duty-free access by the U.S. If finalized, that would be a major relief,” he said.
Currently, a Sri Lankan trade delegation is in Washington D.C. to continue negotiations, with Deputy Economic Development Minister Anil Jayantha stating that the talks involve 1,161 items, of which the U.S. has preliminarily agreed to grant zero tariffs on around 80.
The issue goes beyond rubber. The apparel sector, which accounts for nearly 40% of Sri Lanka’s total exports, has also flagged concerns. High U.S. tariffs could erode Sri Lanka’s competitiveness in its largest single market, which accounts for nearly a third of the country’s total exports valued at USD 3 billion. In comparison, U.S. exports to Sri Lanka remain relatively modest at around USD 300 million.
As the August 1 deadline nears, the outcome of these negotiations will be pivotal in determining whether Sri Lanka can reclaim lost ground or risk further erosion of its export base, especially in rubber and apparel sectors already under strain from global headwinds.
July 21, Colombo (LNW): After a brief resurgence in optimism during May, business confidence in Sri Lanka has taken a sharp turn in June, reflecting renewed concerns over the country’s economic trajectory, according to the latest edition of LMD magazine. The July issue reveals that the fragile recovery in business sentiment has already begun to unravel, with broader concerns overshadowing earlier hopes of sustained economic improvement.
The findings come from the latest LMD-PEPPERCUBE Business Confidence Index (BCI) survey conducted in early June. The survey shows a significant 20 percentage point drop in the number of business leaders who believe the economy will improve over the next 12 months — falling from 76% in May to 56% in June. At the same time, 37% of respondents expect the economy to remain unchanged, up from 17% in the previous month, while only 7% foresee a downturn — unchanged from May.
Despite this downturn in overall confidence, there is a silver lining. The report notes a rebound in sales expectations, with 83% of sales professionals predicting an improvement in volumes over the coming year — a nine-percentage-point increase compared to May. This marks the first uptick in three months, suggesting a potential shift in business performance, if not in confidence about the macroeconomic environment.
Additionally, 16% of respondents expect sales to remain steady — down from 24% in May — while only a small fraction predict a decline. Notably, 69% of those surveyed reported an increase in sales volumes in June compared to the previous month, reflecting a modest but meaningful rise from 66% in May.
This divergence — rising sales sentiment amid falling economic optimism — highlights the complex and often contradictory nature of Sri Lanka’s current business climate. While some companies, particularly in the consumer and services sectors, are seeing improved activity, concerns remain about long-term stability, investment inflows, policy direction, and inflation.
Business leaders have repeatedly called for more consistent economic reforms, greater fiscal discipline, and transparent policy-making to support sustainable recovery. The private sector remains cautious, grappling with high interest rates, currency volatility, and fragile consumer demand despite the IMF-backed stabilization program that has helped improve macro indicators such as foreign reserves and inflation.
Meanwhile, LMD’s July edition also features its annual ranking of Sri Lanka’s Best Workplaces for 2025 — a timely focus on human capital and organizational culture at a time when employee engagement and resilience are critical to navigating uncertainty.
More details and the full cover story can be accessed via LMD’s official website at www.LMD.lk.
July 21, Colombo (LNW): Today (21) will be the deadline for individuals to submit appeals under the second phase of the Aswesuma Welfare Benefits Programme, a key social support initiative aimed at providing assistance to vulnerable households across the country.
Officials from the Welfare Benefits Board have confirmed that close to 30,000 appeals have already been lodged as part of this latest round, reflecting a strong public response and continued demand for welfare assistance.
The programme, which targets low-income families and those facing economic hardship, offers financial support intended to ease the burden of rising living costs and ensure a basic standard of living.
Those who believe they have been unfairly excluded from the scheme — or who need to correct or update their personal details — are being urged to act immediately, as today is the final deadline for submissions. After this date, no new appeals will be accepted for this phase of the initiative.
Appeals must be filed through the respective Divisional Secretariat offices, which serve as the official intake points for documentation and queries. Once submitted, the appeals are forwarded to the Welfare Benefits Board for further assessment and verification.
Applicants are encouraged to double-check supporting documents and ensure they meet all eligibility requirements outlined in the programme’s guidelines.
