By: Staff Writer

July 08, Colombo (LNW): In a landmark move to modernize Sri Lanka’s education infrastructure, SLT-MOBITEL Enterprise has partnered with Royal College Colombo to launch the country’s first full-scale Passive Optical LAN (POL) solution, powered by Gigabit Passive Optical Network (GPON) technology. This pioneering initiative is set to revolutionize digital learning environments, paving the way for a nationwide transformation in educational technology.

The agreement was formalized between SLT Group CEO Janaka Abeysinghe and Royal College Union Secretary Aruna Samarajewa, with senior officials from both institutions present at the signing ceremony. This collaboration highlights SLT-MOBITEL Enterprise’s strategic focus on enhancing educational outcomes through advanced connectivity and smart digital infrastructure.

The fibre-optic POL solution deployed at Royal College is a first for any educational institution in Sri Lanka. It features a robust, high-speed broadband network designed to support modern teaching and learning practices. With enterprise-grade network security, the system ensures safe internet usage, safeguards sensitive academic data, and provides filtered access to educational content, thereby fostering a secure digital learning environment.

According to SLT-MOBITEL officials, this cutting-edge technology will enable seamless integration of e-learning platforms, cloud-based resources, and digital collaboration tools into daily classroom activities. The project aligns with the national goal of digital transformation and sets a benchmark for other institutions aiming to embrace 21st-century learning models.

This initiative also reflects SLT-MOBITEL’s broader commitment to bridging the digital divide in Sri Lanka. As part of its long-term vision, the company plans to extend similar fibre-based solutions to schools and universities across the island, enabling equal access to high-quality education regardless of location. With rural and underserved areas still lacking adequate digital infrastructure, such interventions are crucial in ensuring educational equity and preparing students for a globally competitive future.

Education experts have welcomed the development, noting that such technological integration is vital for equipping students with digital literacy, critical thinking, and innovation skills essential in the modern economy. “What’s being introduced at Royal College is not just a faster internet connection — it’s a transformation in how knowledge is delivered and received,” one academic commented.

By championing digital modernization in education, SLT-MOBITEL is positioning itself as a key enabler of national development. The collaboration with Royal College serves as a model of how public-private partnerships can drive meaningful progress in the education sector, particularly at a time when digital competency is becoming indispensable for future generations.

By: Staff Writer

July 08, Colombo (LNW): In a strategic move aimed at revitalising tourist spending and enhancing revenue collection through formal retail channels, the Sri Lankan Government has reintroduced the Tourist VAT Refund Scheme (TVRS). This long-anticipated revival is not only expected to improve the shopping experience for visitors but also stimulate the local economy, particularly in the retail and manufacturing sectors.

Prompt VAT refunds are a proven global practice that directly incentivises high-spending international travellers, particularly those seeking luxury goods such as gems, jewellery, and handicrafts.

For Sri Lanka, the timely implementation of a fully operational TVRS can significantly enhance its competitiveness against regional tourism markets like Thailand and Singapore, where refund schemes are seamlessly integrated into the airport departure experience.

The more tourists are encouraged to shop within formal retail networks due to the promise of VAT recovery, the greater the revenue inflows to the country—both through direct spending and enhanced tax compliance.

At a time when Sri Lanka is seeking to accelerate post-crisis economic recovery and attract high-value visitors, this initiative represents a practical, high-impact policy tool.

The Inland Revenue Department (IRD) officially reactivated the TVRS on Friday at a newly established VAT refund counter located in the Departure Terminal of Bandaranaike International Airport (BIA). The inauguration ceremony was attended by Industries and Enterprise Development Minister Sunil Handunneththi and Deputy Minister of Finance Dr. Anil Jayantha.

Under the revamped system, eligible tourists over the age of 18 who have stayed in Sri Lanka for less than 90 days may now reclaim VAT paid on purchases exceeding Rs. 50,000 (excluding tax), provided they meet the necessary documentation requirements. This system is expected to channel more transactions through the formal retail sector, reducing tax evasion while simultaneously encouraging larger tourist purchases.

The policy relaunch was endorsed by the President on March 14, following coordinated submissions by the National Gem and Jewellery Authority (NGJA) and the Industries Ministry. Minister Handunneththi highlighted the scheme’s dual benefits—supporting local industries while driving formal-sector compliance.

 He praised the NGJA for championing the initiative during the inaugural meeting of the Export Development Council of Ministers (EDCM) under the current administration.

The TVRS reintroduction complements broader efforts to position Sri Lanka as a premier tourist shopping destination while enhancing tax policy enforcement. Officials from the IRD, NGJA, and other state agencies were present at the launch event, signalling a cross-agency commitment to the success of the program.

If implemented effectively and promoted widely, the VAT refund scheme could mark a turning point in elevating Sri Lanka’s appeal to international travellers and strengthening its fragile fiscal position through more robust retail tax capture.

By: Staff Writer

July 08, Colombo (LNW): Sri Lanka’s Tourism Recovery Slows Amidst Ambitious Targets and Limited Promotion.

Sri Lanka’s tourism sector, once a key pillar of the economy, is showing signs of recovery in 2025 under the current administration. However, the pace remains insufficient to meet ambitious targets set for the year.

Despite a relative improvement compared to the crisis-hit years of the past, the industry still struggles to regain pre-pandemic momentum. 

Key challenges remain unaddressed—chief among them being weak global promotion, an over-reliance on a few source markets, and geopolitical uncertainties dampening long-haul travel. 

While the government touts progress, tourism industry stakeholders warn that current strategies fall short of producing sustained growth.

According to the latest data from the Central Bank, Sri Lanka’s tourism earnings in the first half of 2025 rose by 10% year-on-year (YoY) to $1.71 billion. However, this moderate rebound still lags significantly behind the country’s peak years.

 Earnings for January to June 2025 are down 22% compared to the same period in 2018 ($2.18 billion) and nearly 10% lower than 2019 ($1.9 billion), raising serious questions about the feasibility of reaching the government’s $5 billion year-end target.

Tourism revenue for June stood at $169.5 million, a 12% YoY increase, yet it marked the second-lowest monthly earnings for the year—outpacing only May’s $164.13 million. January 2025’s earnings of $400.66 million remain the highest so far this year, but still fall short of June 2018’s peak monthly revenue of $275.6 million.

The government aims to attract 3 million tourists by the end of 2025. However, as of June, only 1.16 million arrivals have been recorded. 

This means the country must draw in over 1.83 million tourists in the next six months—averaging around 305,000 arrivals per month, compared to the current average of 195,000.

 In June alone, 138,241 tourists visited Sri Lanka, an increase of 22% YoY, yet falling short of the 177,257 target.

To meet the $5 billion revenue goal, Sri Lanka would need to earn more than $3.28 billion in the second half of the year—requiring a monthly average of approximately $547.9 million. This is nearly double the current monthly average of $285.4 million. 

Based on the average tourist stay of nine nights and daily spending of $163, such a leap appears highly optimistic without a dramatic surge in arrivals or spending.

Tourism analysts warn that the mismatch between targets and actual performance is widening. They point to the lack of a comprehensive international marketing campaign, ongoing global travel uncertainty, and insufficient airline connectivity as critical barriers to growth. 

Industry insiders stress that without a strategic reset—focusing on sustainable promotion, diversified markets, and policy support—the sector may not only miss its 2025 goals but also risk stalling its fragile recovery.

By: Staff Writer

July 08, Colombo (LNW): Sri Lanka witnessed a significant surge in private sector credit in May 2025, as licensed commercial banks ramped up lending activity, while credit to the government from commercial banks saw a notable decline, according to the latest Central Bank data.

Private sector credit grew by Rs. 132.9 billion in May alone, up from Rs. 87.0 billion in April, signaling a renewed appetite for borrowing following a brief slowdown during the April festive period. In total, private sector credit rose by Rs. 494.5 billion during the first five months of 2025—compared to just Rs. 71.5 billion during the same period last year—marking a sharp acceleration in lending activity.

This robust expansion has pushed year-on-year private credit growth to 16.1 percent as of May, up from 15.2 percent in April, continuing a rising trend that began in late 2023 when the Central Bank commenced a monetary easing cycle. These favorable lending conditions emerged in mid-2023 as interest rates were slashed in response to falling inflation, allowing banks to extend more credit and businesses to access cheaper funds.

Further boosting confidence in the financial system were improvements in political stability and investor sentiment. The successful restructuring of Sri Lanka’s external debt and a clear electoral mandate in the Presidential and Parliamentary polls in 2024 reduced policy uncertainty. Consequently, the economy rebounded with a 5.0 percent GDP growth rate in 2024, followed by 4.8 percent growth in the first quarter of 2025—driven primarily by industrial activity.

The Central Bank also contributed to the momentum by cutting its benchmark policy rate by 25 basis points to 7.75 percent in May, aiming to drive lending rates further down and steer inflation toward the 5.0 percent medium-term target. Broad-based credit growth was evident across all economic sectors through March 2025.

However, the International Monetary Fund (IMF), in its recent fourth review of Sri Lanka’s economic reform program, warned of limited room for additional rate cuts, citing deflation primarily driven by supply-side improvements. The IMF also cautioned that external shocks could still necessitate further easing of monetary policy.

While private credit expanded, credit to the government from commercial banks dropped by Rs. 53 billion in May. Analysts view this as a healthy development, as it reduces the crowding-out effect on private sector borrowing. However, the Central Bank’s credit to the government unexpectedly jumped by Rs. 123 billion in the same month. This figure, often seen as a proxy for money printing, raised some concerns, although it may also reflect valuation changes in the Central Bank’s portfolio or liquidity adjustments.

Economists warn that excessive reliance on monetary tools such as rate cuts and indirect signaling, without transparency, risks undermining market confidence and reserve accumulation. They draw parallels to previous currency crises, particularly in 2018 and the 2015–2016 period, when similar monetary missteps—amid claims of “rate space” and denial of classical economic principles—triggered capital outflows and currency instability.

 Despite tax hikes and improved fiscal controls post-crisis, Sri Lanka must remain vigilant. Analysts advise cautious management of long-term government securities, particularly under the Central Bank’s 5 percent inflation framework, to avoid re-triggering systemic financial risks.

July 08, Colombo (LNW): Sri Lanka’s official reserves experienced a noticeable contraction in June 2025, as reported by the Central Bank in its latest update on key economic indicators.

The total value of reserve assets stood at US$ 6.08 billion at the end of June, reflecting a fall of US$ 206 million compared to the previous month’s figure of US$ 6.29 billion.

This 3.3 per cent decline is largely attributed to a reduction in the country’s foreign currency holdings, which dropped from US$ 6.23 billion in May to US$ 6.02 billion in June.

Analysts suggest this downward movement signals continued pressure on the island nation’s external finances, even as authorities strive to stabilise the broader macroeconomic environment.