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Protectionist Policies Backfire: Tile Importers in Tax Crossfire

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By: Staff Writer

January 20, Colombo (LNW): Sri Lanka’s tile and sanitary ware importers, already battered by the COVID-19 pandemic and the economic crisis, are now grappling with an even harsher blow—hefty import taxes under the guise of protecting domestic manufacturers. Stakeholders warn this could spell disaster for both businesses and consumers.

The latest proposal includes the introduction of anti-dumping duties, on top of existing taxes, pushing consumer prices to unsustainable levels.

According to Sri Lanka Customs, the effective tax rate on imports could soar to an astonishing 133 percent of the actual value, making essential items like bath ware, floor tiles, and wall tiles prohibitively expensive.

While the government claims these measures protect domestic industries, critics argue the real winners are two dominant local manufacturers who have reaped massive profits during the import ban.

These policies have left consumers and young couples—already struggling to build homes—paying the price. Taxes on tiles have surged from 94% pre-pandemic to 113%, and the planned duties of 133 percent could create a near-monopoly akin to the infamous “sugar and rice mafias.”

A Market in Crisis

The Tile and Sanitary Ware Importers Association warns that these protectionist policies stifle competition, reduce variety, and exacerbate supply chain issues.

They argue the local manufacturers fail to meet the demand or provide the diverse options required by the market, particularly for premium projects like luxury hotels, which rely on branded imports to justify their high rates.

Customs data reveals that while local manufacturers dominate the market (producing 45% of tiles), the remaining 55% must be imported—at exorbitant taxes.

The sanitary ware market, which imports around 20,000 pieces monthly, is similarly burdened with taxes averaging 113% of CIF (cost, insurance, freight) value. Despite these challenges, importers contribute significantly to the economy, supporting over 2,000 distributors and nearly 100,000 direct and indirect jobs.

Economic Implications

The Condominium Developers Association of Sri Lanka (CDASL) has voiced concerns about the broader economic fallout of these measures.

They argue that monopolistic practices and excessive taxation not only drive up construction costs but also hinder housing affordability and accessibility.

With affordable housing a key driver of inclusive growth, these policies risk further destabilizing the industry.

The CDASL and the Importers Association have called for:

An 18% tariff reduction on tiles and sanitary ware to lower construction costs and stimulate growth.

A five-year policy to attract foreign investment in property and real estate.

Reforms to customs valuation to curb under-invoicing and stabilize prices.

A Balanced Approach Needed

Critics urge policymakers to adopt a balanced strategy that safeguards consumer interests while supporting domestic industries. Protectionism, without addressing the monopolistic tendencies of local manufacturers, risks eroding market fairness and public trust.

The time has come for the government to reconsider its approach—one that ensures fair competition, encourages innovation, and makes the dream of homeownership a reality for Sri Lanka’s citizens.

UK tea delegation visits Sri Lanka to explore business opportunities and strengthen trade ties

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January 20, Colombo (LNW): A distinguished delegation of tea industry professionals from the United Kingdom has arrived in Sri Lanka this week with the goal of strengthening trade relations and exploring new business opportunities with the country’s renowned specialty tea producers.

The visit, part of the UK Government-funded Trade Partnerships (UKTP) programme, is designed to foster connections between UK tea buyers and Sri Lankan tea producers across the island’s low, mid, and upcountry regions.

The mission, which includes 12 UK-based tea companies, aims to delve into the distinct and varied flavours of Sri Lankan tea, influenced by the island’s diverse climatic conditions.

The delegation will have the opportunity to witness firsthand the artisanal techniques used in harvesting and processing premium teas, while also gaining an understanding of the environmental, ethical, and social practices that guide local tea production.

Jarmila Sarda, Programme Manager for the UKTP, highlighted the significance of the mission, saying, “This trade mission provides a unique platform for UK buyers to engage directly with Sri Lanka’s high-quality tea producers. By fostering these valuable connections, we hope to strengthen the trade ties between our two nations and support the sustainable growth of the tea sectors in both the UK and Sri Lanka.

To facilitate networking and knowledge exchange, the British High Commission in Colombo will host a tea reception, bringing together UK buyers and key Sri Lankan stakeholders, including the Ceylon Artisanal Tea Association (CATA).

This event will provide a space for open dialogue, where ideas can be shared, and potential partnerships can be explored.

British High Commissioner to Sri Lanka, Andrew Patrick, expressed his enthusiasm for the visit, stating, “It is a pleasure to welcome this delegation of UK tea buyers to Sri Lanka, which is a testament to our shared passion for exceptional, specialty tea. Over the course of this mission, I hope that new and fruitful partnerships will be established, further strengthening the trade ties between the UK and Sri Lanka.

This trade mission forms part of the UKTP programme’s broader efforts to enhance trade relations between the UK and developing countries, with a particular focus on sectors like tea that are of vital economic importance.

The UKTP works to unlock trade potential in priority industries by facilitating connections and promoting sustainable growth.

Through this mission, the programme seeks to bridge markets, build enduring partnerships, and drive long-term economic development within Sri Lanka’s tea industry.

The UKTP programme is managed by the International Trade Centre and funded by the Foreign, Commonwealth and Development Office of the United Kingdom. Its overarching aim is to increase trade from developing nations to the UK and the European Union by maximising the benefits of economic partnership agreements, such as the UK’s Developing Countries Trading Scheme.

CID launches investigation into alleged e-ticket racket for Up-Country trains

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January 20, Colombo (LNW): The Criminal Investigation Department (CID) has informed the Colombo Magistrate’s Court today (20) that it has commenced an investigation into an alleged widespread scam involving the illegal sale of e-tickets for up-country train routes, including the popular Ella line.

The investigation was triggered by a formal complaint lodged by the Department of Railways, which raised concerns about the growing issue of ticket manipulation.

According to reports, certain groups have been exploiting online ticketing systems to purchase large quantities of available train tickets through questionable methods, only to resell them to unsuspecting tourists at inflated prices near railway stations.

The CID’s Computer Crime Investigation Unit has taken charge of the probe and is actively looking into the matter.

In a statement presented to the court, the CID outlined that their efforts will focus on uncovering the details of how these fraudulent transactions are taking place, and they assured the court that further findings will be submitted in due course.

The illegal practice has reportedly caused significant disruption, particularly affecting tourists who rely on the convenience of purchasing tickets for the scenic train routes in Sri Lanka’s central highlands.

As the investigation progresses, authorities are hopeful that they will be able to dismantle the network behind the scam and put an end to the unlawful profiteering from these vital transport services.

With the up-country train routes, such as the journey to Ella, being major attractions for both locals and international visitors, the case highlights growing concerns over the integrity of online ticketing systems and the need for tighter controls to prevent such abuses.

The CID has pledged to continue its efforts to ensure justice and protect the public from such exploitative practices.

Swift resolution to passport crisis amidst ongoing delays

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January 20, Colombo (LNW): As the passport crisis in Sri Lanka deepens, President Anura Kumara Dissanayake has instructed the Attorney General to fast-track the legal proceedings related to the controversial e-passport tender, which was awarded under the previous administration.

The directive aims to resolve the ongoing issues surrounding the passport supply and to ensure the timely availability of travel documents for citizens, according to a report by Daily Mirror.

Last July, the former government announced that Thales, in partnership with local firm Just in Time Technologies (JITT), had been awarded a substantial contract to supply Sri Lanka with 750,000 machine-readable passports and an additional five million e-passports with biometric chips, in line with the latest International Civil Aviation Organisation (ICAO) standards.

However, the contract faced legal challenges when Epic Lanka, a previous supplier and unsuccessful bidder, filed a petition with the Court of Appeal. This led to a temporary halt on the government-approved contract.

In the midst of a change in government, the court eventually allowed the purchase of the 750,000 machine-readable passports from Thales, but the issue surrounding the e-passports remains unresolved.

Public Security Minister Ananda Wijepala confirmed that the President had urged the Attorney General to expedite the court’s review process, which would help the government find a permanent solution to the passport shortage.

The Minister told Daily Mirror that this is a national issue that requires swift attention, underlining the urgency of the matter. However, he acknowledged that even under normal circumstances, it would take at least a year for Sri Lanka to be fully prepared to issue e-passports to its citizens.

In the meantime, the Attorney General has advised the government to proceed with other necessary steps for the e-passport programme while awaiting the outcome of the court case.

Despite these efforts, the preparation for the new passports will still take time, forcing the government to implement interim measures.

To address the immediate shortage of passports, the government has decided to procure 500,000 copies of the ‘P’ series passport as a temporary solution.

The Public Security Ministry held discussions on the matter yesterday and decided to move forward with an open tender to secure the required number of passports.

The 750,000 passports from the previous order are expected to cover the first half of the year, but with growing demand, additional measures are essential.

Army deployed to clean paddy storage facilities across SL

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January 20, Colombo (LNW): In a move aimed at improving the country’s agricultural infrastructure, the Sri Lankan government has announced the deployment of the army to undertake the cleaning and restoration of paddy storage facilities nationwide.

This initiative, which is part of the broader “Clean Sri Lanka” programme, is being carried out under the supervision of the Defence Secretary and Army Commander.

The cleaning efforts are integral to the government’s plan to procure the current season’s paddy harvest, which will be stored in the 209 paddy storage facilities managed by the Paddy Marketing Board.

These storage facilities, however, have suffered from years of neglect, with many of them and the surrounding areas left in a state of disrepair.

As a result, they have become unsuitable for use, posing a challenge to the government’s effort to purchase and store the paddy effectively.

The army’s intervention aims to address this issue, ensuring that the storage facilities are properly cleaned and restored in time for the paddy harvest.

The operation is expected to be completed by January 27, allowing the facilities to be put to use for the storage of the newly harvested crop.

The government’s efforts to maintain the integrity of these facilities will hopefully help stabilise the local rice market and reduce post-harvest losses.

Six killed in gun violence across Sri Lanka this year: Police

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January 20, Colombo (LNW): Sri Lanka Police have confirmed that six individuals have lost their lives in a series of eight shootings that have taken place so far in the current year.

The Police Spokesperson’s Office has stated that four of the victims are believed to be involved in organised crime, suggesting a possible connection to underworld activity.

In addition to those who have died, five others have been injured in these incidents of gun violence. The shootings have sparked concern across the nation as they highlight the ongoing issues with crime and lawlessness in certain areas.

A particularly tragic incident occurred yesterday afternoon in Galaha, where a 24-year-old man was shot and killed in what authorities are treating as yet another targeted attack.

The motive behind the shooting remains under investigation, though it is suspected that it may be linked to criminal factions operating in the region.

Whilst the police continue their investigations into these violent incidents, the rise in gun-related deaths has prompted calls for greater security measures and more effective action against organised crime.

Law enforcement agencies are under increasing pressure to address the underlying causes of this violence and to ensure the safety of citizens.

The authorities have pledged to ramp up efforts to tackle such crimes and bring the perpetrators to justice.

Govt applauds ceasefire agreement in Gaza, expresses hope for lasting peace

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January 20, Colombo (LNW): The government of Sri Lanka has extended its support to the recent ceasefire agreement in Gaza, viewing it as a positive step towards peace in the region.

In a statement issued by the Ministry of Foreign Affairs, Foreign Employment, and Tourism, Sri Lanka expressed its hope that the truce will pave the way for crucial humanitarian and peace-building efforts.

The Ministry highlighted the significance of the ceasefire in facilitating the safe return of internally displaced persons to their homes in Gaza, as well as enabling the exchange of hostages and detainees.

The statement further underscored the importance of ensuring that humanitarian aid reaches those in desperate need, particularly as the region continues to grapple with the consequences of ongoing conflict.

We are hopeful that these developments will serve as a foundation for achieving a sustainable peace not only for Palestine but for the entire region,” the statement read.

The ceasefire provides an opportunity to rebuild lives, strengthen international cooperation, and foster dialogue among all parties involved.

Sri Lanka has long been an advocate for peace and stability in conflict-affected areas, and its endorsement of the ceasefire signals its continued commitment to supporting diplomatic solutions and humanitarian efforts worldwide.

Welfare Benefits Board to begin census for second phase of ‘Aswesuma’ Programme

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January 20, Colombo (LNW): The Welfare Benefits Board has announced that it will commence the census for low-income families who applied for the second phase of the “Aswesuma” welfare benefits programme tomorrow (21).

This step is crucial to ensure that the most deserving individuals and families are selected to receive the financial support offered by the initiative.

With close to 800,000 applications received for this second phase, the Board will carry out an extensive door-to-door census to verify the eligibility of these applicants.

This process aims to identify the families who are most in need of assistance, ensuring that the benefits reach those who require them the most.

The first phase of the “Aswesuma” programme saw an overwhelming 3.4 million applications, with nearly 1.8 million qualifying for the support.

Currently, the programme is providing ongoing assistance to approximately 1.72 million beneficiaries, offering vital financial aid to a wide range of individuals facing economic hardship.

The welfare benefits are distributed in four distinct categories, aimed at providing tailored support to different segments of the population.

The most vulnerable individuals in the “extremely poor” category receive a monthly allowance of Rs. 17,500, while those in the “poor” category are granted Rs. 10,000.

Additionally, families in the “vulnerable” and “transitional” categories receive Rs. 5,000 each month.

The Board has emphasised its commitment to ensuring that the second phase of the programme reaches all eligible applicants who are in dire need of assistance.

Prez AKD reveals move to end corruption and reform political practices in motion

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January 20, Colombo (LNW): President Anura Kumara Dissanayake reaffirmed his unwavering determination to rid the country of political corruption, as promised during his election campaign.

Addressing a large gathering in Katukurunda, Kalutara yesterday (19), the President delivered a candid and forceful speech, reinforcing his administration’s commitment to transparent and accountable governance.

The event took place at the Pakistan Sports Ground in Wettumakada, where President Dissanayake engaged with the public in an open dialogue, outlining key reforms and measures his government is implementing to curb the excesses of previous administrations.

In his speech, President Dissanayake emphasised the shift in government practices since his administration took office. “When we assumed office on November 21, we swore an oath of service with a lean 21-member Cabinet. Unlike previous governments, there are no state ministers under our administration,” he remarked, highlighting the stark contrast to the past, when several ministers hailed from Kalutara alone.

Though we have eight MPs representing Kalutara, only one of them holds a ministerial position. This is because we believe in serving the country, not in doling out ministerial perks to please certain individuals. The days of rewarding political loyalty with government positions are over,” he declared.

The President was equally forthright about the misuse of state resources and appointments in the past, referring to instances where political families took advantage of their positions.

In the previous government, ministers often appointed their relatives to key positions, including their spouses as private secretaries. I recall the former Speaker, Mahinda Yapa Abeywardena, employing only his own family members in his staff. This kind of nepotism and cronyism will no longer be tolerated,” he said, affirming that such practices had been eliminated under his leadership.

He also stressed that, unlike before, ministers are no longer provided with fleets of vehicles or police escorts. “The police force is currently short of 21,000 personnel and they are facing immense challenges. We cannot afford to waste resources on unnecessary privileges for politicians.

The President further shared his government’s efforts to reduce the financial burden of high-security arrangements.

In the past, the country spent over Rs. 700 million annually on the security of a single former president, deploying thousands of police, military, and STF personnel. We’ve ended this wasteful practice. Now, only 60 personnel are assigned to provide security, and if necessary, we will reduce this number further.

Additionally, President Dissanayake made it clear that his government will no longer provide state-owned residences to ministers or former presidents.

I will give a written assurance that I do not require a state-provided residence. However, I do not expect others to follow suit,” he stated.

He also provided details regarding the official residence of former President Mahinda Rajapaksa, which he had ordered to be independently valued by the Government Valuation Department.

The monthly rent for the residence has been set at Rs. 4.6 million. We have not yet valued the land, but under the Constitution, a former president is entitled to either a residence or a third of their salary. In Rajapaksa’s case, we will take over the residence and offer him a third of his salary, which amounts to Rs. 30,000. If he refuses to vacate the premises or pay the balance, he will have to leave,” he explained.

The President also revealed plans to tackle the issue of MP pensions, which he described as an unnecessary burden on the public purse. “We will soon submit a proposal to abolish pensions for MPs,” he confirmed, adding that a proposal regarding the Parliament canteen would also be introduced in the coming weeks.

If MPs want to eat, they will have to pay for their food, just like ordinary citizens. This government will not tolerate any special treatment for elected officials,” he stated.

Showery trend persists across island: Very heavy showers above 150 mm expected

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January 20, Colombo (LNW): Rainy condition is expected to continue further in Northern, North-central, Eastern,Uva and Central provinces, with showers or thundershowers being expected to occur at times in Northern, Eastern, North-central, Uva, Central and Southern provinces, the Department of Meteorology said in its daily weather forecast today (20).

Very heavy showers above 150 mm can be expected at some places in Eastern and Uva provinces and in Hambantota district, and heavy showers above 100 mm can be expected at some places in Northern province and in Matale, Nuwara-Eliya, Polonnaruwa, Galle and Matara Districts, the statement added.

Cloudy skies are expected over most parts of the island.

Showers or thundershowers will occur at several places elsewhere.

Fairly strong winds of (30-40) kmph can be expected at times over Eastern slope of the central hills and Northern, North-central, Eastern and North-western provinces and in Hambantota and Monaragala districts.

The general public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.

Marine Weather:

Condition of Rain:
Showers or thundershowers will occur at several places in the sea areas around the island.
Winds:
Winds will be north-easterly and speed will be (30-40) kmph. Wind speed can increase up to (50-60) kmph at times in the sea areas off the coast extending from Colombo to Kankasanthurai via Puttalam and Mannar. Wind speed will increase up to 50 kmph at times in the other sea areas around the island.
State of Sea:
The sea areas off the coasts extending from Colombo to Kankasanthurai via Puttalam and Mannar will be rough at times. Other sea areas around the island will be fairly rough at times. The swell waves height may increase (about 2.0 – 2.5 m) in the sea areas off the coast extending from Batticaloa to Hambanthota via Pottuvil. (this is not for land area) Temporarily strong gusty winds and very rough seas can be expected during thundershowers.