By: Isuru Parakrama

April 29, Colombo (LNW): The Intertropical Convergence Zone (where winds from the Northern Hemisphere and Southern Hemisphere converge) is affecting the island’s weather, the Department of Meteorology said.

Showers or thundershowers will occur at several places in the most provinces of the island after 01.00 p.m., with heavy showers above 100 mm being expected to occur at some places in Western, Sabaragamuwa, Southern and North-western provinces, the Department said in its daily weather forecast today (29).

Showers or thundershowers may occur at several places in the coastal areas of Eastern and Southern provinces and in Mullaitivu district during the morning as well.

Misty conditions can be expected at some places in Sabaragamuwa and Central provinces during the morning.

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

Marine Weather:

Meanwhile, heat index, the temperature felt on human body is expected to increase up to ‘Caution level’ at some places in Northern, North-central, Sabaragamuwa, Eastern and North-Western provinces and in Monaragala and Hambantota districts.

The public, therefore, is urged to stay hydrated and take breaks in the shade as often as possible, check up on the elderly and the sick, never leave children unattended, limit strenuous outdoor activities, find shade and stay hydrated, and wear lightweight and white or light-coloured clothing.

By: Staff Writer

April 28, Colombo (LNW): A specialized committee has been entrusted with the task of formulating the framework for the Energy Sector Regulator within a concise timeline of two months

The Cabinet of Ministers has approved a proposal to establish a dedicated regulator for the energy sector.

Taking to the ‘X’, Power and Energy Minister Kanchana Wijesekera said the Petroleum, LPG, LNG, Lubricants, Oils, and broader Energy sectors are set to fall under the purview of the newly formed regulatory body.

The Public Utilities Commission of Sri Lanka (PUCSL) will retain its role as the regulator for the electricity sector, while the forthcoming regulator will assume responsibility for governing various aspects of the petroleum and energy industries.

This separation of oversight is expected to streamline regulatory processes, foster greater accountability, and optimize sector-specific regulations.

A specialized committee has been entrusted with the task of formulating the framework for the Energy Sector Regulator within a concise timeline of two months.

This framework is envisioned to encompass a comprehensive spectrum of regulatory considerations, ranging from fair pricing mechanisms and quality assurance to compliance monitoring and environmental standards.

Among the key areas slated for inclusion in the proposed regulatory framework are, fair pricing mechanisms & pricing formulas, quality assurance, compliance monitoring, safety in unloading, storage & distribution, environmental standards, industry collaboration & stakeholder engagement, dispute resolution, public awareness & education, emergency response and risk management.

This separation of oversight is expected to streamline regulatory processes, foster greater accountability, and optimize sector-specific regulations.

A specialized committee has been entrusted with the task of formulating the framework for the Energy Sector Regulator within a concise timeline of two months.

This framework is envisioned to encompass a comprehensive spectrum of regulatory considerations, ranging from fair pricing mechanisms and quality assurance to compliance monitoring and environmental standards.

Among the key areas slated for inclusion in the proposed regulatory framework are, fair pricing mechanisms & pricing formulas, quality assurance, compliance monitoring, safety in unloading, storage & distribution, environmental standards, industry collaboration & stakeholder engagement, dispute resolution, public awareness & education, emergency response and risk management.

By: Staff Writer

April 28, Colombo (LNW): The Committee of Public Finance (COPF), at its most recent meeting, has examined the effectiveness of recent tax increases on tobacco and liquor, aimed at discouraging consumption and boosting government revenue.

Drawing attention to the Laffer curve in taxation, the COPF observed a decline in government revenue over the past two months compared to the same period last year, attributing it to higher taxes that have led to increased smuggling and the adoption of alternative measures.

At the meeting held recently under the chairmanship of MP Harsha de Silva, the COPF members recommended a thorough analysis of the inflation index to guide tax adjustments and research into existing tax systems to prevent revenue loss.

Hpwever State Plantation Enterprises Reforms and State Minister of Finance, Ranjith Siyambalapitiya, announced that in the first quarter of this year, state revenue has reached an impressive Rs. 834 billion.

This achievement not only surpasses the projected revenue but also indicates a growth of 6%.

Motrover the state minister emphasized that with prudent financial management and a consistent revenue pattern, 2024 promises to be a year where revenue targets can be successfully attained.

The COPF also raised concerns about the failure of the Excise Department to address issues such as non-payment of taxes and the use of fake stickers by liquor license holders, despite instructions from the Ministry of Finance.

Expressing dissatisfaction over the lack of action, the Committee emphasized the urgency of implementing recommendations to safeguard government revenue.

Questions were raised regarding the Ministry of Finance’s decision-making process on taxing essential goods, given inefficiencies in revenue collection from liquor license holders.

It was revealed that the Excise Department continues to operate manually, hindering efficient revenue collection and enforcement against illegal activities.

The COPF emphasized the need for digitalization to address these challenges, expressing surprise at delays attributed to cost concerns. They urged immediate measures to solicit quotations for digital software to prevent corruption within the Excise Department.

The Department of Treasury Operations is encountering a challenging task in handling cash flow this year. This difficulty arises from the limitations imposed by existing laws, which prohibit obtaining loans and printing money.

Moreover, government spending has escalated, attributed to both welfare and recurrent expenses. However, it is noteworthy that effective financial management practices are underway in the country.

In comparing recurring expenses between the first quarters of 2020 and 2024, there has been a substantial increase of 35% in the latter period.

Notably, there is a significant surge of 114% in loan interest repayment and a noteworthy uptick of 60% in capital expenditure. Furthermore, the capital repayment of public debt has escalated by 177%, indicating substantial financial commitments.

Shifting focus to welfare expenditure, in the first quarter of 2020, Rs. 93,670 million was allocated for Samurdhi. However, in the corresponding period of 2024, this figure has risen to Rs. 117,107 million, reflecting a notable growth of 25% compared to 2020.

By: Staff Writer

April 28, Colombo (LNW): Defence Secretary Kamal Gunaratne met the Secretary of the Security Council of the Russian Federation where they discussed a wide range of topics, including counter-terrorism efforts, cyber security and defence cooperation, the Ministry of Defence said.

The meeting took place recently in line with the 12th International Meeting on Security Matters held in Saint Petersburg, Russia attended by high-ranking officials from around the world.

The meeting between the two secretaries underscored the importance of fostering international cooperation and collaboration in addressing security threats and promoting peace and stability in the region.

Both parties expressed their commitment to strengthening bilateral ties and exploring avenues for enhanced cooperation in the security domain.

The 12th International Meeting of High-Ranking Officials Responsible for Security Matters provided a valuable opportunity for participants to exchange insights, share best practices and forge partnerships aimed at addressing common security challenges facing the global community.

Oriflame announces withdrawal from Sri Lanka due to economic challenges

Oriflame, a global beauty company, has announced its decision to withdraw from the Sri Lankan market effective 15 May 2024, citing a range of economic challenges that have made its operations unsustainable.

In a statement released, Oriflame expressed deep regret over its departure from Sri Lanka, a market it has been a part of since 1997. Despite years of dedication and resilience in the face of various challenges, the company cited a confluence of factors that have rendered its operations untenable.

“Unfortunately, despite our efforts, the macroeconomic environment, characterised by a series of financial crises, the global impact of COVID-19, stringent import restrictions, fluctuating exchange rates, increased operational costs and regulatory changes has significantly hindered our operations.

These factors have made it unsustainable for us to continue our business in the foreseeable future,” it added.

By: Staff Writer

April 28, Colombo (LNW): State Minister of Finance Shehan Semasinghe highlighted that the Sri Lankan economy has stabilized and growth is now emerging.

The Sri Lankan appreciation from Rs. 360 per USD in 2022 to Rs. 300 per USD at present.

He posted on X: “It is important to understand that exchange rates in Sri Lanka are market-determined which allows currency values to adjust according to supply and demand dynamics in the foreign exchange market”.

He said that strengthening of the Sri Lankan Rupee will make purchasing of goods and services cheaper over the period.

He added: “This will result in increased purchasing power, help reduce inflationary pressures and contribute to price stability and stability in the financial system. Importantly reduce the burden of debt servicing of the country”.

The State Minister said that the GDP which contracted 7.8% in 2022 returned to growth in the 3rd and 4th quarters of 2023, with Q4 GDP growth reaching 4.5%.

He says recognising progress in macroeconomic reforms, the measures to stabilise the economy have been thus far been successful, and the government is now in the process of shifting the economy to a new growth path.

Sri Lanka’s economy is projected to see moderate growth of 2.2% in 2024, showing signs of stabilization, following the severe economic downturn of 2022. But, the country still faces elevated poverty levels, income inequality, and labor market concerns, says the World Bank’s latest bi-annual update.

The Sri Lanka Development Update, Bridge to Recovery, highlights that Sri Lanka saw declining inflation, higher revenues on the back of the implementation of new fiscal policies, and a current account surplus for the first time in nearly five decades, buoyed by increased remittances and a rebound in tourism.

However, poverty rates continued to rise for the fourth year in a row, with an estimated 25.9% of Sri Lankans living below the poverty line in 2023. Labor force participation has also seen a decline, particularly among women and in urban areas, exacerbated by the closure of micro, small, and medium-sized enterprises (MSMEs).

Households are grappling with multiple pressures from high prices, income losses, and under employment. This has led to households taking on debt to meet food requirements and maintain spending on health and education.

“Sri Lanka’s economy is on the road to recovery, but sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical, alongside a continuation of the path of robust and credible structural reforms,” emphasized Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka.

April 28, Colombo (LNW): During yesterday’s parliamentary session, MP Gamini Waleboda raised alarm over a burgeoning financial scam involving the unlawful transfer of funds from current and savings accounts designated for online transactions. He revealed that the scam is allegedly orchestrated by students from an institute specializing in online transaction training.

Expressing grave concern, the MP cautioned that individuals who have engaged in online transactions may be vulnerable to this fraudulent activity. He urged affected parties to promptly report any suspicious transactions to both the Central Bank of Sri Lanka (CBSL) and the Telecommunications Regulatory Commission.

According to MP Gamini Waleboda’s disclosure, the extent of the scam is significant, with between 1,000 and 1,500 accounts reportedly compromised thus far. Describing the situation as serious, the MP called for swift action to address and mitigate the impact of this fraudulent scheme.

April 28, Colombo (LNW): The Committee of Public Finance (COPF) convened recently to scrutinize the efficacy of recent tax hikes on tobacco and liquor, aimed at curbing consumption and bolstering government revenue. However, concerns arose over dwindling revenue attributed to increased smuggling and alternative measures in response to the tax hikes, prompting a thorough examination.

Chaired by MP Harsha de Silva, the COPF highlighted the necessity of analyzing the inflation index to guide future tax adjustments and researching existing tax systems to mitigate revenue losses. Moreover, the Committee expressed dismay at the Excise Department’s failure to tackle issues like tax evasion and the use of counterfeit stickers by liquor license holders, despite directives from the Ministry of Finance.

The COPF underscored the urgency of implementing recommendations to safeguard government revenue, particularly emphasizing the importance of digitalization to enhance revenue collection efficiency and combat illegal activities. Despite concerns over cost, the Committee urged prompt action to solicit quotations for digital software to streamline operations within the Excise Department.

Additionally, COPF approved three Orders under the Excise (Special Provisions) Act, detailed in Gazette No. 2364/36, Gazette No. 2361/44, and Gazette No. 2364/35. Effective from January 1, 2024, these Orders amend business hours for liquor licensed establishments and revise excise duties on various tobacco and alcoholic products, following extensive discussions during the COPF meeting.

MPs including Patali Champika Ranawaka, U. K. Sumith Udukumbura, Mayantha Dissanayake, Chandima Weerakkody, Madhura Withanage, Dr. Nalaka Godahewa, and Isuru Dodangoda, along with officials from the Excise Department and the Department of Fiscal Policy, were present at the Committee meeting.