Sri Lanka may be celebrating record-breaking tourist arrivals, but behind the glossy numbers lies a stark truth: the state-run tourism promotion machinery is failing to convert footfalls into meaningful economic value. Despite October 2025 marking the highest visitor count ever recorded for that month, earnings remain anaemically low an indictment of amateur planning, inexperienced leadership, and institutions obsessed with arrival statistics rather than attracting high-spending travellers.
According to the Central Bank of Sri Lanka, tourism earnings in October rose by a negligible 0.3% year-on-year, reaching just US$186.1 million. The figure is shockingly low compared to US$287.4 million earned in October 2018, when fewer tourists generated far more revenue. This widening mismatch exposes the core weakness of Sri Lanka’s tourism strategy: empty promotional slogans instead of targeted, value-driven marketing.
The country welcomed 165,193 visitors in October, a 22% increase over last year and even higher than the 153,123 arrivals recorded in 2018. Yet the revenue picture remains bleak. The authorities’ fixation on arrival numbers has overshadowed a more crucial metric spending power. With average daily tourist spending stuck at an unimpressive US$171, Sri Lanka continues to attract low-budget travellers rather than the high-value segments it desperately needs.
The earnings trend across the year paints an equally troubling picture. July revenue fell 3% to US$318.5 million, August dropped 8.2% to US$258.9 million, and September managed only a timid 1% increase to US$182.9 million. Even January the best month of 2025 generated only US$400.6 million, the highest since 2020 but still far below global tourism benchmarks.
For the first ten months of 2025, the sector brought in US$2.65 billion, a modest 4.9% improvement from last year. Yet this figure is still 33% below the earnings of 2018, when Sri Lanka collected US$3.53 billion over the same period and ultimately recorded its highest-ever annual tourism earnings of US$4.38 billion.
Despite this glaring underperformance, the state tourism institutions continue to operate without strategic direction. Industry insiders point to leadership dominated by politically appointed individuals lacking professional expertise. Their plans often underwhelming, outdated, or hastily assembled—fail to target high-spending markets such as Europe, East Asia, or the Middle East. Instead, authorities boast of raw arrival numbers while ignoring the more important task of increasing per-tourist revenue.
With only two months left in the year, Sri Lanka faces an almost impossible climb to meet its US$5 billion revenue target. To get there, the country would need to generate over US$2.34 billion in November and December more than four times its current monthly earnings. Tourism experts dismiss this as “unrealistic” given the poor demand momentum and lack of strategic promotional efforts.Until Sri Lanka replaces its incompetent tourism leadership and adopts a serious, high-yield strategy, the nation will remain trapped in a self-inflicted paradox: millions of tourists arriving, but the economy barely feeling their presence
When people trust that institutions are fair, that the police are honest, and that their neighbours will not exploit them, they feel secure
The freedom from fear of catastrophe allows people to take healthy risks and pursue personal fulfillment
Finland’s education system is globally renowned not just for its academic results, but for its emphasis on equity, practical life skills, and teacher respect
Finally, the Finnish recipe includes a powerful meaning in life. This often stems from a strong work-life balance, high participation in hobbies, cultural activities, and volunteerism, and the time afforded by their efficient society to focus on family, friends, and personal passions
Finland has consistently been ranked the world’s happiest nation, a title it has held for several years running in the UN’s World Happiness Report. This remarkable achievement isn’t attributed to a single factor but is a deeply rooted societal construct built upon strong pillars of trust, security, nature, excellent education, discipline, respect for the law, mutual respect, and a profound sense of meaning in life. Understanding this “Finnish Recipe” offers profound insights into how a vibrant, culturally rich nation like Sri Lanka could embark on its own journey toward becoming a truly happy and prosperous society.
Unpacking the Finnish Pillars of Happiness
The core of Finnish happiness lies in a combination of pragmatic societal structures and cultural values that prioritise collective well-being and individual freedom.
Trust and Security: The Foundation of Society
At the heart of Finnish society is an extraordinarily high level of social trust. Finns generally trust their government, their institutions, and, perhaps most importantly, each other. This pervasive trust minimises friction and anxiety in daily life. When people trust that institutions are fair, that the police are honest, and that their neighbours will not exploit them, they feel secure. This security isn’t just about low crime rates, but also about economic security provided by a robust welfare state. The system ensures that basic needs—healthcare, education, and unemployment support—are met, creating a powerful safety net that reduces the paralysing stress of potential failure or misfortune. The freedom from fear of catastrophe allows people to take healthy risks and pursue personal fulfillment.
Nature and Sisu: A Profound Connection
Finns maintain an exceptionally close attachment to nature. Surrounded by vast forests and thousands of lakes, nature is not just a backdrop but an integral part of life. The concept of “Everyman’s Right” (Jokamiehenoikeus) allows anyone to walk, ski, cycle, or camp freely on any land, regardless of ownership, provided they don’t cause harm or disturb others. This connection is restorative, mitigating stress and promoting physical health. Furthermore, the national trait of Sisu—a unique Finnish term often translated as stoic determination, grit, and perseverance in the face of adversity—works hand-in-hand with this nature connection. Sisu is the inner strength that allows Finns to endure long, dark winters and tough times, knowing that they can rely on their own resilience and the restorative power of their environment.
Excellence in Education and Civilization
Finland’s education system is globally renowned not just for its academic results, but for its emphasis on equity, practical life skills, and teacher respect. Education is entirely free, from pre-school to university, ensuring that a child’s success is not dictated by their parents’ wealth. The system prioritises play, shorter school days, and minimal homework in the early years, fostering a lifelong love of learning and curiosity, rather than relentless competition. This, combined with a high level of civilization—meaning well-functioning public services, clean cities, and efficient infrastructure—creates an environment where daily life is predictable, comfortable, and conducive to personal growth.
Discipline, Respect, and Meaning in Life
The Finnish approach is underpinned by a quiet but firm discipline and respect for the law. High compliance with rules, from traffic laws to tax obligations, is seen not as an imposition, but as a necessary contribution to the well-being of the community. This mutual respect extends to honouring others’ personal space and time, leading to a less confrontational and more harmonious social atmosphere. Finally, the Finnish recipe includes a powerful meaning in life. This often stems from a strong work-life balance, high participation in hobbies, cultural activities, and volunteerism, and the time afforded by their efficient society to focus on family, friends, and personal passions. Happiness, for Finns, is less about fleeting euphoria and more about quiet contentment derived from a life that is stable, meaningful, and lived in harmony with others and nature.
The Sri Lankan Context: Challenges and Aspirations
Sri Lanka is a nation blessed with immense natural beauty, a rich cultural heritage stretching back millennia, deeply ingrained family values, and a naturally warm, hospitable people. Yet, recent years have seen profound economic and political challenges that have severely eroded public confidence and happiness. Widespread corruption, political instability, crippling debt, and a lack of social mobility have created an environment of anxiety and disillusionment.
To transition from this state of instability to a truly happy and sustainable nation, Sri Lanka must strategically adopt and adapt the core principles of the Finnish model, leveraging its own unique strengths.
The 10-Point Blueprint for a Happier Sri Lanka
Making Sri Lanka a happy nation requires a generational commitment to systemic reform and a profound cultural shift. It is not about simply copying Finland, but about translating its principles into a workable Sri Lankan context.
Rebuilding Trust and Establishing the Rule of Law (The Anchor)
Zero Tolerance for Corruption: This is the most critical first step. Trust in institutions is impossible when corruption is endemic. Sri Lanka must establish truly independent bodies with real power to investigate and prosecute corruption at all levels, regardless of political affiliation.
Strengthening the Judiciary and Police: The justice system must be perceived as fair, efficient, and equally applied to all citizens. The police force must transition from being perceived as an instrument of political power to a service dedicated to community safety and law enforcement with respect and integrity.
Transparency in Governance: Government spending, procurement, and decision-making must be made fully transparent and accessible to the public, fostering accountability and rebuilding faith.
Investing in World-Class, Equitable Education (The Engine)
Focus on Quality, Not Just Quantity: While literacy rates are high, the education system must be reformed to emphasise critical thinking, practical skills (financial literacy, vocational training), and emotional intelligence, rather than rote memorization.
Dignifying the Teaching Profession: Teachers must be highly trained, well-paid, and respected as the key architects of the nation’s future, ensuring the best minds are drawn to the profession.
Reducing the Burden of Examinations: Move away from the crippling, hyper-competitive exam-based system, which is a major source of stress, and adopt a more holistic assessment model, mirroring global best practices.
Prioritising Environmental Stewardship (The Soul)
Reclaiming the “Pearl of the Indian Ocean”: Sri Lanka is defined by its beaches, forests, and unique biodiversity. A national policy must protect natural resources fiercely, enforce waste management, and combat deforestation and pollution, especially in coastal areas and sensitive ecological zones.
Integrating Nature into Daily Life: Promote and protect urban green spaces, public parks, and access to natural areas, allowing the island’s inherent beauty to serve as a restorative force for its citizens, much like Finland’s forests.
Fostering Civic Discipline and Mutual Respect (The Glue)
Promoting Civic Responsibility: Introduce mandatory, sustained public awareness campaigns focusing on simple civic responsibilities: traffic laws, proper waste disposal, queueing, and respecting public property. Compliance must be encouraged through education and fair, consistent enforcement.
Celebrating Diversity: Actively promote and teach the value of the island’s multi-ethnic and multi-religious identity. Mutual respect and understanding across communities are fundamental to long-term national harmony and happiness.
Securing Economic Stability and Social Safety Nets (The Shield)
Beyond Growth: Focus on Equity: Economic policy must prioritise lifting the lowest income brackets and closing the vast wealth gap. Sustainable economic growth must be paired with job creation, fair wages, and worker rights.
Strengthening the Safety Net: While a comprehensive welfare state like Finland’s is a long-term goal, Sri Lanka must immediately enhance targeted social safety nets for the poor, the elderly, and those with disabilities, ensuring no citizen is left without basic sustenance, thereby reducing catastrophic personal risk.
Cultivating a Meaningful Work-Life Balance (The Purpose)
Productivity Over Presence: Encourage employers to focus on output and efficiency rather than long, ineffective hours. Promote flexible work arrangements where feasible, allowing citizens time for family, leisure, and personal pursuits—the core ingredients of long-term contentment.
The Power of Community and Seva (Service): Channel the inherent Sri Lankan culture of Seva (selfless service) and Dansala (community sharing) into structured volunteerism, which provides individuals with a tangible sense of purpose and contribution to their community.
Strengthening the Judiciary and Police: The justice system must be perceived as fair, efficient, and equally applied to all citizens
Democratizing Public Services (The Convenience)
Efficiency in Government: Simplify bureaucratic processes. Government services (e.g., obtaining documents, permits) should be efficient, digitized, and free from unnecessary delays and ‘red tape,’ reducing one of the most common daily frustrations for citizens.
Investing in Public Transport: A modern, safe, and reliable public transportation system (trains, buses) is a great equalizer, improving economic access and reducing daily stress and traffic congestion, which severely impact quality of life in major urban centers.
Promoting Mental Health and Sith Sathuta (Inner Peace)
Destigmatizing Mental Health: Launch national campaigns to de-stigmatize mental health issues.
Accessible Counseling: Integrate mental health education and accessible counseling services into the public healthcare and school systems, teaching citizens the skills to manage stress and cultivate inner peace (Sith Sathuta), a concept deeply resonant with Buddhist and other spiritual traditions on the island.
Harnessing the Power of Youth and Innovation (The Future)
Empowering the Next Generation: Create platforms for youth voices to be genuinely heard in policy-making. Harness their energy and digital literacy to drive innovation, entrepreneurship, and new, ethical business models.
Reversing the Brain Drain: Create an attractive, stable environment (economically and politically) that incentivizes the highly skilled diaspora and local talent to stay or return, by offering competitive opportunities rooted in ethical governance.
Leadership by Example (The Call to Action)
Servant Leadership: Leaders at all levels—political, business, religious, and community—must embody the values of integrity, humility, and service. A nation cannot thrive if its leaders do not lead by the moral example of austerity, honesty, and dedication to the common good.
Conclusion: The Journey to Freedom and Happiness
The Finnish success story is a testament to the fact that happiness is not a commodity, but the natural outcome of a well-functioning, ethical, and equitable society. For Sri Lanka, the journey is one of restoration and re-centering. It requires moving away from the short-term gains of corruption and instability and towards the long-term dividend of national character.
The “Finnish Recipe” is not just a list of ingredients; it is a social contract based on the simple premise that every citizen deserves to live a life free from existential fear, with access to nature, education, and justice. By prioritizing Trust over personal gain, Equity over hierarchy, and Discipline over chaos, Sri Lanka can begin to harness its extraordinary potential.
The ultimate goal is not just economic recovery, but achieving true Nidahas—a profound freedom from suffering and anxiety, leading to a state of collective, sustainable happiness. This task belongs to every Sri Lankan, from the highest office to the individual citizen choosing to respect a traffic light or keep their street clean. By upholding the highest standards of civic virtue, Sri Lanka can transform its inherent warmth and natural beauty into the most enviable title of all: The Happiest Nation in the Indian Ocean.
“PEACE COMES FROM WITHIN. DO NOT SEEK IT WITHOUT”(Lord Buddha)
(The writer, Major General Dr. Boniface Perera is a battle hardened Infantry Officer who served the Sri Lanka Army for over 36 years, dedicating 20 of those to active combat. In addition to his military service, Dr. perera is a respected International Researcher and Writer, having authored more than 200 research articles and 16 books. He holds a PhD in economics and is an entrepreneur and International Analyst specialising in National Security, economics and politics. He can be reached at [email protected])
A high-level discussion aimed at formulating a systematic programme to address the challenges faced by local potato farmers was held this morning (18) at the Presidential Secretariat, the President’s Media Division (PMD) announced.
The meeting was chaired by Minister of Agriculture, Livestock, Lands and Irrigation K. D. Lal Kantha and Minister of Trade, Commerce and Food Security Wasantha Samarasinghe, with the participation of potato farmers from major growing regions.
Speaking at the discussion, Minister Lal Kantha said the Food Security Committee has decided to prioritise farmer concerns when developing solutions, while ensuring that proposed measures do not adversely affect consumers. He stressed that the Government, the Department of Agriculture and farmers must act collectively rather than operating as separate entities.
Farmers highlighted that the cost of potato cultivation has risen sharply, with seed purchases alone accounting for around 40% of total production costs. They cited issues such as irregular fertiliser application, poor-quality inputs, low yields and the shortage of high-grade seed potatoes as key contributors to escalating costs. Farmers also noted that no previous administration had engaged them in such discussions and expressed hope that the current government would deliver tangible solutions.
Responding to the concerns raised, Minister Wasantha Samarasinghe said the Government is considering establishing a mechanism for the purchase of potatoes through Sathosa, at prices ranging from Rs. 200 to Rs. 300 per kilogramme, while also reviewing the possibility of increasing taxes on imported potatoes.
Minister Lal Kantha further stated that the Government will look into providing direct support to farmers. Plans will be prepared in collaboration with farmers and the Department of Agriculture to produce high-quality fertiliser, agro-inputs, and superior-grade seed potatoes in order to reduce production costs. He added that a registration process for potato farmers will be introduced to streamline government interventions and ensure an organised cultivation system.
The Ministry of Agriculture noted that annual potato consumption in Sri Lanka stands at approximately 225,000 metric tonnes, while local production meets only 70,000 to 80,000 metric tonnes, with the balance imported to meet demand.
The meeting was also attended by Deputy Minister of Agriculture and Livestock Namal Karunaratne, Ministry Secretary D. P. Wickramasinghe, officials from the Ministry and Department of Agriculture, and farmer groups from Badulla and Nuwara Eliya.
The State Partnership Program (SPP) Memorandum of Understanding (MoU) signed between the Montana National Guard and Sri Lanka’s Ministry of Defence on November 14 reaffirms the two nations’ shared commitment to transparency and trust, U.S. Ambassador to Sri Lanka Julie Chung stated.
Ambassador Chung noted that the United States looks forward to expanding cooperation through the SPP, particularly in the areas of disaster response, maritime security, and professional military exchanges—areas she said would benefit both countries and contribute to a more secure Indo-Pacific region.
The MoU, signed on Friday at the Ministry of Defence, formalizes a defense partnership between the Montana National Guard, U.S. Coast Guard District 13, and the Sri Lankan Armed Forces under the U.S. Department of Defense’s State Partnership Program.
The agreement was signed by Ambassador Julie Chung, Adjutant General of the Montana National Guard Brigadier General Trenton Gibson, and Sri Lanka’s Secretary of Defence Air Vice Marshal Sampath Thuyacontha (Retd). The U.S. Embassy described the MoU as a historic milestone in U.S.–Sri Lanka defense relations, strengthening professional ties and advancing their shared goal of peace through partnership in the Indo-Pacific.
Former President Mahinda Rajapaksa is expected to take part in the joint opposition rally organized by a coalition of parties led by the Sri Lanka Podujana Peramuna (SLPP) on November 21.
The rally, which will be held in Nugegoda on Friday, is set to draw supporters from several opposition parties.
Speaking to the media during his visit to the Temple of the Sacred Tooth Relic in Kandy—where he received blessings for his birthday—Rajapaksa confirmed his intention to attend the protest rally.
He stated that the public must stand up against what he described as the “anti-people actions” of the current government.
The SLPP, the Sri Lanka Freedom Party (SLFP), the United National Party (UNP), and several other political groups have agreed to participate in the Nugegoda gathering.
Education is a process of sharing collective knowledge and holds the power to unite people politically, socially, and economically, Prime Minister Dr. Harini Amarasuriya said yesterday.
She made these remarks while addressing a conference in Colombo focused on strengthening cooperation among countries in Asia, the Middle East, and the Pacific on the role of education in the global Green Transition.
The conference is held under the umbrella of the Erasmus+ Programme, funded by the European Union, which is one of the world’s leading initiatives for international cooperation in education, training, youth, and sports. The programme supports mobility, intercultural exchange, capacity development, policy advancement, and provides wide-ranging opportunities in higher education, vocational training, youth development, and institutional partnerships in Sri Lanka. The event will continue until November 20.
Expanding on Sri Lanka’s education landscape, Prime Minister Amarasuriya said that while the country has inherited a high literacy rate from its post-colonial education system, the current model has become overly focused on individual achievement.
She noted that excessive competition and examination pressure have distorted the true purpose of education.
“Education should not be a process aimed solely at individual achievement. What we strive for today is to move away from this model and restore the true purpose of education—sharing collective knowledge and strengthening transformative learning,” the Prime Minister said.
She emphasised that education’s transformative power is often overlooked, stressing that it goes beyond personal success and plays a critical role in uniting societies and shaping shared expectations.
As Sri Lanka undertakes new education reforms, she highlighted the importance of collaborative learning, fostering responsibility toward others, and building an understanding of global and environmental challenges.
Dr. Amarasuriya also pointed out the rise of unscientific methods and misinformation, saying that the need for a strong and transformative education system is more vital than ever. Such an approach, she added, would help ease pressures within the university system and encourage meaningful dialogue and cooperation.
“Transforming our education system from a cage of competition into a free space of collaboration and responsible knowledge-sharing is one of the fundamental challenges Sri Lanka must overcome for its future,” she said.
The event was attended by the Ambassador of the European Union to Sri Lanka, Carmen Moreno, Secretary to the Ministry of Education, Higher Education and Vocational Training Nalaka Kaluwewa, as well as regional representatives and senior government officials.
Several spells of showers will occur in Northern, North-central and Eastern provinces.
Showers or thundershowers will occur at several places in the Western, Sabaragamuwa, Southern and Uva provinces and in Nuwara-Eliya district after 1.00 p.m.
Misty conditions can be expected at some places in Sabaragamuwa, Central, Uva and Southern provinces during the early hours of the morning.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
“Like rabbits caught in the headlights of justice, the corrupt political class now scurry in panic as the people’s President advances relentlessly to extirpate the twin scourges of corruption and narcotics.”
I. The Eclipse of the Old Order For more than seventy-five years, Sri Lanka’s political destiny was scripted by a select constellation of men who orbited the nation like celestial bodies, controlling its fate while basking in borrowed light. Politics became a two-horse race between dynasties rather than ideas. Nepotism, corruption, and impunity formed the gravitational field that kept the old order intact. Their kingdoms were built not upon principle but patronage — on the commerce of favours and the currency of deceit. The ordinary citizen, caught in the crossfire of promises and betrayals, grew disenchanted yet voiceless, convinced that change was a mirage shimmering on the horizon. Then came 2024 — the year the heavens shifted. A new force emerged, not from palatial corridors but from the pulse of the people. It spoke of accountability, of clean governance, of merit over lineage. And the electorate, weary of hypocrisy, responded with resounding faith. For the first time in decades, Sri Lanka witnessed the dawn of a people’s government — born not of inheritance, but of integrity.
II. The Orphans of Power Those who once ruled now wander like political orphans — dispossessed, directionless, and discredited. Cast out from the orbit of influence, they cling to one another in a grotesque fraternity of the failed. As their political lives ebb away, the formerly powerful display a sudden, almost desperate unity. Old rivals, once locked in bitter enmity, now embrace in panic. The same figures who once vilified one another on the public stage now whisper in smoky backrooms, plotting a shared resurrection. Yet their unity is not born of vision; it is born of fear. Fear of justice catching up. Fear of accountability becoming real. Fear of a nation that has finally learned to see through the masquerade.
III. A Futile Revolt And so they rally again — the rejected, the indicted, the morally bankrupt — calling for protest meetings and “people’s uprisings.” But these are not movements of conscience; they are spasms of desperation. Their slogans ring hollow, their indignation counterfeit. They speak of democracy only when their own privileges are threatened. They decry injustice only when justice begins to close in.
They summon the crowd, not to defend the people, but to defend themselves from the people’s verdict. Theirs is not a revolution but a revenge mission — a last-ditch attempt to wrest power from a government that still commands the overwhelming trust of the majority. The new administration, though young, has become a powerhouse of public will — focused, resolute, and untainted. Against such legitimacy, the revolt of the corrupt is doomed before it begins.
IV. The People’s Mandate This government stands not on slogans but on substance. It is cleansing the Augean stables of corruption, dismantling cartels, exposing the narcotic underworld, and restoring discipline to a country long paralysed by patronage. Naturally, those who once prospered in chaos now cry foul. But the people are not fooled. They have endured too much, suffered too long, and learned too well. They recognise the new pretenders for what they are — scavengers circling a banquet that has ended.
Their rallies may attract cameras, but not conviction; noise, but not numbers. For Sri Lanka today stands aligned behind reform, not regression. The people’s mandate is no longer a temporary loan of trust — it is a moral contract. And breaking that contract for the sake of resurrecting the corrupt would be treason, not politics.
V. The Verdict of History History, ever the sternest judge, offers little mercy to those who betray their nation’s faith. The orphans of power can howl in unison, but they cannot halt the march of renewal. Their cries are the echoes of a dying order — a requiem for a politics that thrived on deceit and died of exposure. Sri Lanka has turned a page. The age of hereditary politics has given way to the era of accountability. The light of reform, once kindled, cannot be extinguished by the shadows of yesterday. Let them protest, if they must — it will only confirm their irrelevance. For no mob can overturn a moral awakening; no alliance of decay can dethrone the people’s conscience. The tide of renewal has risen, and history does not flow backwards.
Author’s Note This essay is penned in the wake of a proposed protest by the so-called “joint opposition” — a union not of ideals but of insecurities. The article is a reflection on how the corrupt, when cornered, momentarily discover fraternity, and how the nation, once betrayed, learns the wisdom of vigilance.
When the Dispossessed of Power Unite, the Nation Must Stand Guard!
November 18, Colombo (LNW): A fresh gazette notice has confirmed that the Gambling Regulatory Authority Act, No. 17 of 2025, will officially come into operation on December 01, 2025.
The announcement, dated November 16 and signed by President Anura Kumara Dissanayake, marks the final step in bringing the long-debated legislation into force.
Parliament approved the bill with amendments during its Second Reading on August 19, 2025, paving the way for a comprehensive overhaul of Sri Lanka’s gambling framework.
The new Act effectively dissolves several long-standing laws, including the Betting on Horse-Racing Ordinance, the Gaming Ordinance, and the 2010 Casino Business Regulation Act.
Under the new regime, the Gambling Regulatory Authority will serve as a centralised, independent body responsible for supervising all gaming activity in the country. Its mandate extends to issuing binding social-responsibility guidelines, particularly targeting online platforms, offshore gaming operations, and activities conducted aboard vessels or within the Colombo Port City.
The government’s recent budget, with its well-intentioned promise to build a more equitable society, has brought a familiar refrain: higher taxes on businesses. The new mandate, which subjects every business with a monthly turnover of 3 million LKR to an 18% VAT, is presented as a progressive tool. The objective is noble to fund social programmes and provide a financial lifeline to our most vulnerable citizens. No one can argue with the goal of lifting people out of poverty.
However, we must pause and ask a critical question: At what cost does this revenue come? There is a growing fear that this policy, rather than building a stable and equitable society, will systematically dismantle the very engine of our economy: our high-end entrepreneurs and established small to medium enterprises (SMEs).
The unseen burden on the backbone of the economy
Labelling a business with a 3 million LKR monthly turnover as a “high-income earner” is a fundamental miscalculation. Turnover is not profit. A business generating 36 million LKR annually in revenue may have razor-thin profit margins after accounting for raw material costs, skyrocketing utility bills, employee salaries, loan repayments, and transportation. Imposing an 18% VAT on the total revenue, not profit, can easily push a viable, job-providing enterprise into the red.
Consider a local manufacturer or a tech start up. They are not the corporate giants with vast financial reserves to absorb such shocks. They are the ambitious, the innovative, and the true “antropinurs” (entrepreneurs) who have built something from nothing. This VAT policy does not just tax their income; it taxes their ambition and penalises their success.
The chilling effect on entrepreneurship
The message this policy sends is perilous: “Grow, but not too much.” The 3 million LKR threshold acts not as a gateway to contributing more to society, but as a barrier to growth. Business owners will be incentivised to artificially suppress their turnover to stay below the VAT threshold. This could mean:
Hesitating to hire new employees. Avoiding investment in new equipment or technology. Reducing production and scaling back expansion plans.
In essence, the policy actively discourages the growth and scalability we so desperately need to revive our economy. We are not fostering entrepreneurship; we are caging it.
The irony of “Equity”
The ultimate irony is that the quest for equity may create greater inequity. When businesses are stifled, the first to suffer are their employees. Job creation stalls, wages stagnate, and eventually, layoffs begin. The very low-income persons the government aims to support will find fewer employment opportunities. The social programmes funded by this VAT will then have to function as a permanent crutch, rather than a temporary hand-up, because the natural job-creating mechanism of the economy has been damaged.
Furthermore, the increased cost of doing business will inevitably be passed on to the consumer. The 18% VAT will be baked into the price of goods and services, fuelling inflation and eroding the purchasing power of every citizen, including the poor. This creates a vicious cycle where the government taxes to provide support, while its own policies make the cost of living more unaffordable.
We must move beyond simplistic taxation that views businesses as mere piggy banks to be broken for social spending. A truly progressive and equitable system would:
Tax Profit, Not Turnover: The core of the issue. Taxing net income is a fair measure of a company’s ability to pay. Simplify the Tax Regime: Create a clear, predictable, and easy-to-comply system that encourages formalisation, not evasion. Invest in the Ecosystem: Use tax revenue not just for consumption (social programmes) but for investment in infrastructure, education, and innovation grants that help businesses grow and create higher-quality jobs in the country.
The goal of a more equitable Sri Lanka is shared by all. But we cannot build a stable house by burning the foundations. Our entrepreneurs are not the enemy; they are our greatest asset. It is time for a policy that nurtures them, not one that cripples them with well-intentioned but ultimately destructive taxes.
The government need to reconsider this approach and collaborate on a framework that fosters both growth and justice, ensuring that our pursuit of equity does not come at the cost of our prosperity.
