ECONOMYNEXT – Sri Lanka businessman Kulappu Arachchige Don Dhammika Perera has bought 106.9 million shares of East West Properties PLC for 3.2 billion rupees.

This is approximately 77.40 percent of the issued shares of the company.

Perera bought 106,991,848 shares at 30.20 each, according a stock exchange filing.

The stock closed at 31.80 rupees. 

East West Properties operates over 100,000 square feet of warehousing space and 30,000 square feet of commercial office space. 

The company owns several properties including 32 apartments at Crescat Residences. 

The Colombo Magistrate’s Court has granted bail to four suspects, including former Department of Motor Traffic (DMT) Commissioner General Nishantha Anuruddha Weerasinghe, who were arrested over the alleged illegal registration of a vehicle without proper clearance from Sri Lanka Customs.

Colombo Chief Magistrate Thanuja Lakmali Jayatunga delivered the ruling after reviewing submissions made by both the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) and the defense.

According to the court order, three suspects were released on two sureties of Rs. 1 million each, while the fourth suspect was granted bail on a surety of Rs. 500,000. In addition to bail, the Magistrate imposed a travel ban on all four suspects and instructed them to surrender their passports to the court.

The case has been scheduled for further hearing on November 14. The suspects are facing charges related to the unlawful issuance of registration documents for a luxury vehicle, which allegedly caused a financial loss to the state and violated standard Customs and registration procedures.

The Inland Revenue Department (IRD) has launched a series of criminal investigations into persistent tax evasion cases, particularly focusing on Value Added Tax (VAT) defaulters. This crackdown, aligned with recommendations from the International Monetary Fund (IMF) and global anti-money laundering and counter-terrorist financing commitments, marks a significant move toward tightening tax compliance and enhancing state revenue.

Finance Ministry officials confirmed that recovery proceedings have already begun to confiscate assets of defaulters, including directors of five companies who collectively owe Rs. 4.3 billion in unpaid VAT. The IRD is now investigating properties and other holdings of these individuals to reclaim the outstanding dues.

Among the major defaulters is Mendis & Company, with directors Arjuna Aloysius and Anthony John evading nearly Rs. 4 billion—the largest amount recorded in the crackdown. Other notable cases include K.A. Geetha Prasanga, currently serving a prison sentence for evading Rs. 46.6 million, and Samaranayake & Company, whose directors owe more than Rs. 233 million. The company’s appeal is under judicial consideration, and bail has been granted under court-imposed conditions.

While enforcement measures intensify, the IRD has also seen positive compliance. Companies like Vijitha Enterprises and North Sea Company have fully settled their dues of Rs. 32.5 million and Rs. 66.1 million, respectively.

To reinforce its operations, the IRD has established a Financial Intelligence Unit (FIU) to monitor financial flows and combat fraud, along with an Internal Affairs Unit (IAU) and a Complaints Management and Investigation Division to strengthen internal governance and transparency.

Sri Lanka’s VAT reforms, which came into effect on January 1, 2024, have significantly bolstered government revenue. VAT collections rose by 88.6% in 2024, reaching a record Rs. 1.3 trillion—up from Rs. 694.5 billion in 2023—and surpassing income tax for the first time. However, the full impact of VAT on imports remains unrealized due to ongoing import restrictions throughout 2024.

The number of registered VAT-paying entities rose sharply from 14,128 in 2023 to 21,542 in 2024—a 52.5% increase. As of February 2025, this figure had reached 22,043, signaling an expanding tax base and improved compliance, especially within the financial services sector.

Further reforms are on the horizon. A VAT compliance program is currently underway to support the transition to mandatory e-filing by July 1, 2025. This precedes the formal repeal of the Simplified VAT (SVAT) system on October 1, 2025. In tandem, a broader income tax compliance initiative has been introduced to manage the surge in newly registered taxpayers since 2024.

A senior IRD official reiterated the government’s unwavering commitment to combating tax evasion, noting the formation of a special task force to identify and prosecute non-compliant individuals and corporations.

Despite imprisonment in some cases, the IRD affirms that tax liabilities must still be fully recovered, emphasizing that prior incarceration does not exempt defaulters from financial accountability.

In a major shift toward progressive taxation, the Sri Lankan government is preparing to implement sweeping reforms to its tax system that will place a greater burden on wealth and property, aligning with International Monetary Fund (IMF) recommendations. The move is aimed at easing pressure on lower-income citizens and improving revenue collection from high-income earners.

According to the IMF’s Fourth Review under the Extended Fund Facility (EFF), the government has committed to introducing a range of wealth and property-related taxes, with the goal of strengthening fiscal stability and fostering economic equity. These measures include a property tax expected by mid-2027, a wealth transfer tax, and a reformed capital gains tax regime.

Central to these reforms is the introduction of an Imputed Rental Income Tax (IRIT) by 2025, which will apply to residential properties exceeding a specific value threshold. The IMF also recommends replacing the current exemption for the sale of a first home with a value-based threshold, broadening the tax base.

Another key element is the revamp of the capital gains tax (CGT). The IMF proposes removing the existing CGT exemption for listed companies and revising value-added tax (VAT) treatment for owner-occupied housing. This would include taxing the first sale of residential properties and harmonizing the tax structure with international norms.

To support local government finances, property taxes at the municipal and provincial levels will also be updated. The outdated annual value (AV) assessment method will be replaced with more responsive and market-based valuations. A gradual approach will be adopted to prevent excessive tax burdens, and hardship relief mechanisms will be introduced for vulnerable property owners.

As part of the 2025 national budget proposals, the government also plans to raise stamp duties on land leases and introduce a new electricity usage tax. These measures are intended to expand the revenue base while promoting greater fiscal autonomy for local authorities.

To facilitate accurate and fair tax assessments, Sri Lanka is developing a national property database supported by a digital Sales Price and Rents Register (SPRR). This system will collect and digitize valuation data starting with records from Municipal Councils. The first phase of digitization is expected to be completed by the end of 2025.

The final SPRR, essential for determining property values and implementing various taxes, is due to be fully operational by September 2025. It will feed into the broader property database, scheduled for completion by June 2026. By September 2026, the Inland Revenue Department, Valuation Department, Land Registry, and the general public will have access to this comprehensive system.

This strategy, endorsed in a letter of intent sent to IMF Managing Director Kristalina Georgieva, underscores the government’s intention to shift more tax responsibility to high-net-worth individuals. The broader objective is to create a fairer, more transparent tax system that enables better-targeted welfare programs and supports long-term economic resilience.

The Colombo-based think tank Advocata Institute has called on the Sri Lankan government to reform its e-commerce tax and customs framework, urging authorities to adopt globally accepted practices such as exempting low-value imports and enabling online platforms to collect taxes at the point of sale.

 The appeal comes amid mounting public frustration over recent delays and complications in parcel clearance, especially for goods ordered from platforms like AliExpress.

Advocata criticized the recent changes at Sri Lanka Customs, which now require individual declaration of each parcel using Harmonized System (HS) codes, a move that has resulted in massive backlogs and disrupted the previously smooth process of small-parcel clearance. Traditionally, Sri Lanka Customs had used a weight-based clearance method for e-commerce items.

Globally, many countries adopt a “de minimis” threshold—where low-value goods, usually under USD 150, are exempt from import duties. The U.S. has a generous threshold of USD 800 per shipment.

While VAT is still charged, customs duties are waived to streamline trade and reduce administrative burden. Sri Lanka, however, has not implemented such a system and continues to levy multiple border taxes including Import Duty, CESS, and the Port and Airport Levy (PAL), making the system unnecessarily complex and opaque.

“The current system is unmanageable,” Advocata warned, pointing out that customs officers are overwhelmed and small and medium enterprises (SMEs) suffer delays in sourcing vital inputs from international suppliers. The new HS code requirement for every small parcel makes cross-border e-commerce inefficient and unsustainable, the think tank argued.

Advocata also proposed a Vendor Collection Model, already used by countries like Singapore and Australia, where e-commerce platforms collect and remit taxes at the point of sale. This model improves compliance and reduces pressure on customs while offering fairer treatment to consumers.

 They suggested exempting parcels below USD 75 under a clear de minimis threshold and mandating only large-scale platforms to register and remit taxes locally or through appointed agents.

“This approach protects consumer choice, ensures fair competition, and secures revenue for the state,” Advocata emphasized.

Meanwhile, addressing confusion about Value Added Tax (VAT) on digital services, State Finance Minister Anil Jayantha clarified that no new tax has been introduced. He explained that the VAT inclusion for digital services—such as those offered by foreign platforms like Uber—was proposed and passed in the 2025 Budget.

“There’s been misleading media coverage suggesting an 18% VAT will be newly imposed from October 1. This is entirely inaccurate,” Jayantha stated. He said that VAT collection on digital services was legally approved months ago, and delays in implementation were due to procedural formalities, including gazette publication and legal amendments.

He emphasized that the tax is not new, but merely brings previously exempted digital services into the existing VAT net to ensure fairness in revenue generation. “Digital services, regardless of whether they’re domestic or foreign, are subject to VAT as per the amended law. There is no cause for panic,” he added.

Sri Lanka has also faced criticism from the International Monetary Fund (IMF) for its restrictive trade practices, including taxing credit card payments for online purchases. Critics argue that such protectionist measures fuel corruption and limit consumer access to affordable goods, even resulting in instances where food is smuggled due to excessive taxes.

Advocata urged authorities to modernize the legal and tax frameworks to better accommodate the growing importance of cross-border e-commerce and digital services, both to boost consumer welfare and secure state revenue in a fair and efficient manner.

Prime Minister Dr. Harini Amarasuriya underscored the importance of ensuring that every Sri Lankan citizen can access essential public services in their mother tongue and sign language, aligning with the Government’s policy vision of “A Prosperous Country – A Beautiful Life.”

She made these remarks at the closing ceremony of National Languages Week, themed “Path to Reconciliation,”held on Monday (July 7) at the Sri Lanka Foundation Institute, organised by the Justice and National Integration Ministry.

The National Languages Week, observed from July 1 to July 7 under the theme “Talk Together – Live Together,”aimed to promote linguistic harmony, mutual respect, and national unity. The final event was attended by Justice and National Integration Minister Harshana Nanayakkara, as well as officials, diplomats, and students.

In her address, Prime Minister Amarasuriya said:

“Language is not just a tool for communication but a symbol of identity and dignity. National language policies must go beyond rhetoric and ensure that courts, police stations, hospitals, schools, and public offices are inclusive environments where all citizens can express themselves and receive services in the language they are most comfortable in.”

She stressed that failing to provide such access could make people feel excluded or marginalised, turning a service delivery issue into a deeper societal concern.

“Creating schools where Sinhala and Tamil students learn each other’s languages, hospitals where patients are treated respectfully in their own language, and a justice system accessible to all – these are not luxuries, but necessities in a truly reconciled and harmonious society.”

The Prime Minister also announced that the 2026 education reforms will focus on the integration of all national languages into mainstream education, treating language learning as a core value, not merely an academic subject.

Justice and National Integration Minister Harshana Nanayakkara, in his remarks, emphasised unity:

“While we may have come from different pasts, we all share a common future. Let us build a Sri Lanka grounded in genuine reconciliation and unity.”

At the event, the Prime Minister awarded certificates to schoolchildren who won essay competitions and to individuals who passed the National Language Proficiency Examinations, organised by the Official Languages Commission and the Official Languages Department.

Dignitaries present included the High Commissioners of Canada and Bangladesh, Deputy Minister Muneer Mulaffar, Justice Ministry Secretary PC Ayesha Jinadasa, and Prime Minister’s Secretary Pradeep Saputhanthri, among others.

Mass Media and Health Minister Dr. Nalinda Jayatissa announced in Parliament yesterday (July 8) that the National Media Policy will be officially launched and come into effect within the next three months.

The Minister emphasised that the policy is being formulated collaboratively with key media stakeholders, with the Government playing only a facilitator’s role. The aim is to reach a broad consensus between the media industry and the Government to ensure a balanced and transparent framework for media operations in Sri Lanka.

Dr. Jayatissa clarified that the Government has no intention of imposing restrictions on the media. Instead, the objective is to allow media institutions to operate freely and ethically in accordance with the existing common media laws. He also noted that any institution failing to comply with these laws will be dealt with under the prevailing legal framework.

In response to a question raised by NPP MP Prof. Sena Nanayakkara, the Minister revealed that Sri Lanka currently has 23 television channels, including five state-run and 18 privately-owned channels.

He further disclosed that the Ministry is drafting a code of ethics for journalists as part of the broader initiative to encourage responsible and ethical journalism. The new policy will also focus on improving the quality of programmingacross both state and private TV channels. An action plan is being developed to support this goal, aimed at ensuring better content standards for the benefit of the public.

Dr. Jayatissa expressed hope that all media outlets would adhere to high ethical standards while operating in Sri Lanka’s competitive media environment, and contribute positively to public discourse.

Sri Lanka has been ranked among the top three summer travel destinations for July and August by Emirates, the world’s largest international airline, based on its latest global booking and search data.

According to Emirates, flight searches for Sri Lanka have risen by 32%, positioning the island as a favourite destination for travellers seeking rich cultural experiences, pristine beaches, lush tea country, and affordable luxury.

As global travel surges this summer, Emirates highlights a growing trend of tourists shifting toward off-the-beaten-path destinations and immersive cultural experiences. Flight searches across the network have increased by 7% year-on-year, with Sri Lanka, Mauritius, and Vietnam standing out as the most in-demand destinations.

Vietnam topped the list, registering a 61% increase in interest, followed by Mauritius with 41%, and Sri Lankawith its 32% jump. Emirates currently operates four daily flights to Colombo, connecting Sri Lanka seamlessly with Europe, the Middle East, and the Americas.

The data shows that Sri Lanka’s popularity is growing across several key source markets. Travellers from the UK, US, India, Germany, and Australia are showing increased interest in Sri Lanka as a long-haul summer destination, with UK travellers alone increasing their searches by 12%.

Other top-performing destinations in Emirates’ network include:

• Japan, with a 28% rise in searches due to its unique culture and cuisine,
• France, which saw a 25% increase, fueled by summer events and tourism,
• And Dubai, which continues to draw global travellers year-round.

Emirates noted that Indian travellers are expanding their horizons to destinations like Ireland, Australia, and New Zealand, while German travellers show a preference for East Asia, including Japan, Vietnam, and South Korea.

The data also revealed travel trends:

• Solo travellers dominate inbound trips from the US, India, and Australia,
• Families from the UK, US, and India are opting for varied-length summer getaways,
• Couples, particularly from Germany and Australia, favour extended vacations lasting up to a month.

Emirates’ booking insights reflect Sri Lanka’s re-emergence as a top-tier global travel destination, helped by its diverse offerings, competitive pricing, and strong air connectivity. The airline’s strategic connectivity and tourism partnerships continue to boost Sri Lanka’s visibility as a must-visit location for international travellers.

A total of 144,250 premises were inspected across the country during the recently concluded National Mosquito Control Week, according to Dr. Prasheela Samaraweera, Media Spokesperson of the National Dengue Control Unit and Community Medical Specialist at the Ministry of Health.

Speaking at a press conference held today (July 9) to present the week’s outcomes, Dr. Samaraweera stated that 35,495 locations were identified as potential mosquito breeding grounds, while 4,275 premises were found to contain active mosquito larvae.

As part of enforcement measures, 3,812 red notices were issued, and legal action has been initiated against 982 premises that failed to comply with mosquito control regulations.

Among the high-risk areas identified were homes, schools, government institutions, workplaces, factories, and religious sites. Specifically, inspections at 400 schools revealed that 226 had potential breeding sites.

A breakdown of the inspections revealed that:

• 131,789 homes were inspected, with 31,967 found to have possible breeding sites.
• 955 government institutions were examined, with 292 identified as having potential mosquito breeding grounds.

Dr. Samaraweera also reported that 30,228 dengue cases and 16 related deaths have been recorded island-wide so far this year. The highest number of cases have been reported from the Western, Sabaragamuwa, Southern, and Eastern provinces.

The Ministry of Health urges the public to remain vigilant and eliminate stagnant water sources to help curb the spread of dengue, particularly with monsoon rains contributing to mosquito breeding.

President Anura Kumara Dissanayake yesterday (July 8) emphasised the urgent need to strengthen and digitalise the Inland Revenue Department (IRD) as a cornerstone of achieving Sri Lanka’s digital economy objectives by 2030.

The President made these remarks during a high-level discussion held at the Presidential Secretariat with key representatives from the IRD, the Ministry of Digital Economy, and the Ministry of Finance, according to the President’s Media Division (PMD).

A major focus of the meeting was the ongoing operation and local procurement process of the IRD’s Revenue Administration Management Information System (RAMIS). The discussion also explored current shortcomings in the system and the technological solutions required to address them.

President Dissanayake stressed that digitalisation is essential for effective tax administration, noting that it plays a vital role in reducing tax irregularities, simplifying procedures, and enhancing transparency. He also called for the introduction of Point of Sale (POS) machines to modernise transactions and ease the tax payment process for citizens.

According to the PMD, these reforms are designed to expand the national tax base and support Sri Lanka’s broader digital transformation agenda.

Officials from the Inland Revenue Department noted that the creation of a dedicated Ministry for Digital Economyunder the current administration will significantly accelerate the IRD’s digitalisation efforts.

The digital transformation of the IRD is seen as a critical component of the government’s overall economic strategy and is expected to drive long-term growth and efficiency across public financial systems.

Key attendees at the meeting included Secretary to the President Dr. Nandika Sanath Kumanayake, Finance Ministry Secretary Dr. Harshana Suriyapperuma, Chief Advisor to the President on Digital Economy Dr. Hans Wijesuriya, and senior officials from the IRD, Ministry of Finance, and Ministry of Digital Economy.