By: Staff Writer

January 19, Colombo (LNW): The Public Utilities Commission of Sri Lanka (PUCSL) has approved Lanka Electricity Company Ltd. (LECO) to launch a prepaid electricity tariff scheme for retail consumers. 

Expected to roll out by March or April 2025, this initiative empowers users from Negombo to Galle with greater control over energy usage.

According to PUCSL Director of Communications Jayanath Herath, the system features a flexible top-up mechanism that promotes energy efficiency.

Under the scheme, households consuming up to 90 kWh per month will pay Rs. 15 per kWh, while higher usage incurs Rs. 23 per kWh. Fixed monthly charges range from Rs. 100 to Rs. 1,000 based on consumption.

 Herath emphasized the scheme’s potential to help users better manage expenses amidst rising costs, encouraging responsible energy use.

 Sometime back in 2021  the Public Utilities Commission of Sri Lanka (PUCSL), together with Lanka Electricity Company Pvt. Ltd. (LECO), has launched an interest pay scheme for the security deposits of electricity for LECO consumers.

Former PUCSL Chairman Janaka Ratnayake, said, “steps gave been  taken  to protect the rights of electricity consumers since the inception of the Commission in accordance with the powers vested in it.

It has published the Declaration of the Rights and Obligations of Electricity Consumers and many regulatory decisions to protect the rights contained therein and to protect consumers. 

In particular, more than 20 different regulations, rules and guidelines have been enacted to protect consumers.

Speaking further he said the payment of interest on electricity consumer deposits is a benefit provided to the consumer under Section 28 of the Sri Lanka Electricity Act. 

“Accordingly, electricity utility service providers have to pay interest to electricity consumers for the electricity deposit.”

The PUCSL has the authority to decide the interest rate that to be paid to the consumers and the PUCSL declared that the interest rate for this year would be 8.68 per cent, he said adding that the interest rate changes annually.

Accordingly, LECO has commenced paying interest to its customers from yesterday onwards where the interest will be deposited to the electricity bill account of the consumer, the PUCSL chairman said. “LECO alone will pay Rs. 42 million annually to its customers as a benefit through this scheme.”

“We hope that in the future other licensees will implement this interest payment program. When other electricity distribution licensees also implement this interest benefit scheme in the future, around Rs. 1,200 million will flow into the hands of electricity consumers annually.” Rathnayake added.

By: Staff Writer

January 19, Colombo (LNW): The Planters’ Association of Ceylon (PA) has praised the Government’s decision to delay the abolition of the Simplified Value Added Tax (SVAT) system to 1 April 2025.

Initially planned for removal on 1 January 2024, this postponement came in response to strong opposition from exporters and business chambers.

While the delay provides temporary relief, the PA urged the Government to retain SVAT until a viable, stakeholder-endorsed alternative is implemented.

The SVAT system, introduced in 2011, has been crucial for Regional Plantation Companies (RPCs) and smallholder tea farmers. Eliminating SVAT without a robust replacement could disrupt Sri Lanka’s tea value chain, causing income losses for exporters, particularly tea and rubber smallholders, who form the backbone of the industry.

Historically, Sri Lanka’s tea industry thrived until 2014, with exports exceeding 300 million kg and generating $1.5 billion annually. However, adverse policy decisions, such as the 2015 Glyphosate ban and the 2021 fertiliser ban, severely reduced tea yields.

By 2023, production had dropped to 223 million kg, and export earnings fell to $1.3 billion, affecting the livelihoods of around 480,000 smallholders who rely on tea for sustenance.

Smallholders, who earn about Rs. 23,000 monthly on average, are particularly vulnerable. They receive 68% of auction prices for their green leaf, but the removal of SVAT could cost them Rs. 24 billion annually, representing an 18% income loss directly borne by smallholder families.

 Over 90% of Sri Lanka’s tea is exported, and SVAT has mitigated cash flow issues by simplifying VAT refunds, which are often delayed for six to seven years. The recent imposition of an 18% VAT on exports exacerbates these issues, tying up vital capital and increasing operational costs for RPCs and smallholders alike.

For instance, with 1 kg of tea priced at Rs. 1,200, the 18% VAT adds Rs. 216, increasing the upfront cost to Rs. 1,416. Exporters must pay this VAT upfront, straining their cash flow and limiting reinvestment in production. These inefficiencies resulted in an alarming Rs. 60 billion in financial losses for the tea industry in 2023 alone.

The PA highlighted the urgency of a strategic Government intervention to support the sector. Key recommendations include ensuring access to affordable fertilisers and agrochemicals to lower production costs and increase productivity. Streamlining VAT refund processes is also critical to alleviate financial pressures on exporters and improve cash flow.

Competitor nations like Kenya exemplify what Sri Lanka could achieve with the right policies. In 2014, Kenya’s tea production stood at 415 million kg and rose to 550 million kg by 2023, showcasing remarkable growth. Meanwhile, Sri Lanka’s production has stagnated or declined, raising concerns about the industry’s future.

The PA stressed that retaining SVAT and implementing strategic reforms are essential to stabilising Sri Lanka’s tea industry, boosting its competitiveness, and restoring it to a trajectory of sustainable growth.

January 19, Colombo (LNW): In a move aimed at bringing down prices and alleviating the burden on consumers, Trade and Commerce Minister Wasantha Samarasinghe has revealed plans to expand the Sathosa retail network to 1,000 outlets across the country.

The announcement came during the reopening of the renovated Sathosa outlet in Anuradhapura, where the Minister spoke about the government’s efforts to make essential goods more affordable.

Samarasinghe explained that the government has already made significant strides in reducing the cost of living, with prices of many everyday items dropping by 17 per cent over the last three months.

The Minister further revealed that, as part of the government’s ongoing efforts to control prices, plans are in place to establish over 150 new Sathosa outlets in 2025 alone, with a long-term target of reaching 1,000 outlets within the next three years.

“We are determined to ensure that every citizen has access to affordable goods. Over the past three months, we have managed to reduce the prices of 40 essential items by 8 per cent. With the planned expansion of the Sathosa network, we aim to create more touchpoints where the public can buy necessities at reasonable prices,” Samarasinghe stated.

The government’s strategy of expanding the Sathosa network is part of a broader effort to tackle inflation and improve access to essential goods across the country, particularly in rural and underserved areas.

With the new outlets, the government hopes to strengthen its presence in local markets and provide consumers with more options to purchase products at controlled prices.