Business

16 fish canning factories see closures and layoffs thanks to tax policy ‘favourable’ for importers

Published

2 years ago

2024/03/4

Sri Lanka Canned Fish Manufacturers Association (CFMA) addresses the press in Colombo about the absence of a level playing field for local canneries. Pic by Nishan S. Priyantha

“We want a level playing field and not subsidies or protectionism’

by Sanath Nanayakkare

Importers of canned fish have completely crowded out local manufacturers because of a government tax policy skewed towards importers, says Sri Lanka Canned Fish Manufacturers Association (CFMA) President Shiran Fernando.

“It is pathetic that the authorities have not cared about it yet although we have officially informed them of the tax anomaly which has translated into an unfair ‘pricing advantage’ for canned fish importers and a curse for local manufacturers,” he says.

“The government charges less tax from canned fish importers allowing them to mark their prices down by about Rs. 125- 150 for a can of fish. And we, the local canned fish manufacturers who pay income tax, VAT, electricity bills, water bills, EPF/ETF etc., cannot compete with importers who pay only a border tax and get away with it. These canned fish importers need only a desk and chair and some money in the bank or a credit facility from foreign canned fish manufacturers. Their business is such a convenient one whereas ours is a constantly dedicated factory process. And the government’s tax policy complements the importers perfectly to bulldoze the local manufacturers of canned fish who have built this industry from zero. We can’t figure out why these highly qualified government authorities don’t get this basic and simple thing,” he says.

When asked to elaborate on their Association’s current concern, Fernando says,” Look, importers pay only Rs. 200 per kilo of fish they import as a special commodity levy – not for a can; for a kilo of fish. They don’t pay any VAT. We are told that when there is a border tax in the form of special commodity levy, VAT can’t be levied. We don’t know whether that is true or not. However, for us, there is income tax, VAT at the rate of 18%, workers’ wages, fuel costs, EPF/ETF etc. Altogether these push our production costs high. And when we finally send our products to the market, we find that the importers have conveniently converted their tax advantage into a strategic pricing point, and consumers who have been hard hit by the cost of living choose to buy the cheaper product. Importers get two good things at the same time; less tax and pricing advantage whereas we are caught in a double bind between higher production cost and less competitiveness in the market,” he says.

“It has been more than two months now since we pointed out this matter to the authorities in the responsible line ministries. If the government doesn’t want to address this issue objectively and quickly enough, the repercussions of permanent closure of our factories could be dire not only for the 16 manufacturers of our Association who have invested in this industry, but also for the 4,000 direct employees who have toiled for more than 10 years to develop the industry up to this level. This could be the end of a success story of import substitution,” he says.

“Mind you, there will be a lot of Linna fish coming to the market as the season is nearing. But the fisher folk will not see us coming to buy their catch because we can’t compete with imported products that enjoy a pricing advantage over us. This could cause an economic and a huge social issue”, Fernando warns.

When asked what they expect the authorities to do to resolve the issue, Kapila Balasuriya, Secretary CFMA says,” We are not asking for tax subsidies. We know that the government needs revenue and we are willing to pay it. But the government must act upon creating a level playing field for both local manufacturers and importers. That’s key. We must make it clear that we are not asking for protectionist measures.

But the tax anomaly has become a blessing for importers and a curse for local industry. This must be rectified. We have suggested the authorities to increase the Rs.200 per kilo SCL applicable to importers to Rs. 500. Then that will equalize our competiveness in the market and the consumers will be able to buy canned fish for freshness, quality and price instead of considering the price only. We appeal the authorities to create this level playing field for competitiveness. That’s not asking too much as local manufacturers because creating a level playing field for all players in the market is in line with international trade rules.”

CFMA represents all the registered canned fish manufacturers of the country numbering 16 leading companies in the industry. According to CFMA, their production had saved foreign currency worth of 79 million euros per year for the government by way of import substitution in given years.

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Business

Parliament rocked by LKR 13.2 billion NDB fraud: Systemic failure or regulatory lapse?

Published

22 hours ago

2026/04/9

Sahan Weerasooriya

Ravi Karunanayake and Bimal Ratnayake

The corridors of power in Sri Lanka’s Parliament became a theater of intense debate on April 7, 2026, as lawmakers confronted the fallout of the National Development Bank (NDB) fraud scandal. What began as a Securities Exchange Commission (SEC) disclosure has now transformed into a scathing critique of the nation’s financial regulatory domain.

Opposition MP Ravi Karunanayake took to the floor to demand accountability, not just from the bank, but from the regulatory authorities themselves. Highlighting the alarming jump in reported losses – from an initial LKR 380 million on April 2nd to a massive LKR 13.2 billion by April 6th – Karunanayake questioned how such a systemic breach could occur undetected.

“I want to focus your attention on the operations… and its supervision process,” Karunanayake told the House. “I was more shocked about what we heard at the Public Finance Committee… as there was no one to take the responsibility for detecting this earlier”.

The MP emphasised that his intention was not to trigger a ‘run’ on the bank, but to ‘purify’ oversight mechanisms, which he suggested had failed in their primary duty of early detection.

The gravity of the situation was underscored by Minister Bimal Ratnayake, who confirmed that the President has been formally briefed on the fraud. The Minister assured Parliament that the administration would take all necessary actions to ensure ‘financial sector’s discipline’ in the wake of this fraud.

Regulatory authorities have already moved to assert authority, issuing a statement on April 5, 2026, to provide oversight and maintain liquidity stability. However, the ‘appropriate regulatory support’ mentioned came with heavy strings attached as follows:

Dividend Freeze: The bank was ordered to immediately suspend cash dividends scheduled for distribution in April 2026.

Operational Curbs: NDB has been directed to restrict discretionary spending and halt all branch expansions until further notice.

Forensic Mandate: Under regulatory and board pressure, NDB is appointing an independent forensic auditor to conduct an impartial review of its systems.

The LKR 13.2 billion fraud is estimated to impact NDB’s unaudited total asset base by 0.7%. While NDB Chairman Sriyan Cooray and CEO Kelum Edirisinghe were noted for their expertise by Ravi Karunanayake, the focus has shifted toward the systemic vulnerability of the sector. As the criminal investigation and internal inquiries proceed, the primary question remains: how did a fraud of this magnitude remain invisible to the regulators until it reached the breaking point?

With the Public Finance Committee now involved, the NDB incident is no longer just a corporate crisis – it is a test of the integrity of Sri Lanka’s entire financial supervisory framework.

By Sanath Nanayakkare

Business

Ceylon Chamber of Commerce announces leadership transition

Published

22 hours ago

2026/04/9

Sahan Weerasooriya

Shiran Fernando / Perera / Alikie

The Ceylon Chamber of Commerce announces a planned and orderly leadership transition, underscoring its commitment to strong governance, leadership continuity, and long-term institutional stability.

Accordingly, Shiran Fernando has been appointed Secretary General and Chief Executive Officer, effective 8th May 2026, succeeding . Buwanekabahu Perera, who will conclude a three-year tenure at the helm of the Chamber.

Commenting on the transition, Krishan Balendra, the Chairperson of The Ceylon Chamber of Commerce stated:

“This leadership transition reflects the Chamber’s long-standing belief that strong institutions are built through continuity, sound governance, and deliberate succession planning. Over the past three years, the Chamber has been further strengthened institutionally, allowing us to move forward with confidence. The Board is fully assured that this transition will ensure stability while positioning the Chamber to meet the evolving needs of our members and the broader economy.”

Supporting this transition, institutional stability is further reinforced by the continued leadership of Ms. Alikie Perera, who serves as Deputy Secretary General, Chief Operating Officer / Financial Controller and CEO of GS1 Lanka. With over three decades of service spanning multiple leadership cycles and governance eras, including service under 16 successive Chairpersons, she has been instrumental in sustaining the Chamber’s operational integrity and financial discipline. Notably, she has played a key role over two decades in steering the Chamber’s flagship platforms, including the Sri Lanka Economic and Investment Summit (SLEIS) and the Best Corporate Citizens Awards [BCC Awards], both of which have become nationally and internationally recognised benchmarks. Her continued role provides assurance that institutional memory and organisational continuity remain firmly intact.

Business

Dialog Finance Launches Next-Generation Virtual Debit Card, Elevating Digital Payments in Sri Lanka

Published

22 hours ago

2026/04/9

Sahan Weerasooriya

Dialog Finance PLC, Sri Lanka’s leading fintech innovator, announced the launch of its Virtual Debit Card, the first in Sri Lanka to enable customers to generate multiple virtual cards for different purposes within a single app. This cutting-edge, digital-first payment solution is designed to deliver smarter control, enhanced security, and effortless everyday transactions, making online payments safer, more flexible, and fully manageable through the Genie app.

Designed for today’s mobile-first lifestyle, the Virtual Debit Card is managed seamlessly within the Genie app, allowing customers to generate multiple virtual cards tailored for specific use cases such as subscriptions, individual merchants, or shared spending scenarios. Each card offers customizable spending limits, real-time transaction tracking, and the option to delete or deactivate it once its defined use is complete. By isolating transactions across different purposes, this approach significantly enhances online payment security while providing complete visibility and control.

Issued on the UnionPay International network, the Virtual Debit Card ensures wide global acceptance for online and in-store payments. It also paves the way for future enhancements, including Tap to Pay functionality on NFC-enabled smartphones, enabling fast, contactless in-store transactions scheduled to be activated soon as part of Dialog Finance’s ongoing product evolution.

Commenting on the launch, Nazeem Mohamed, CEO & Director of Dialog Finance PLC, said, “This launch strengthens our position as Sri Lanka’s leading fintech provider. By offering multiple virtual cards, and intuitive in-app controls, we are delivering a secure, flexible digital payment experience that perfectly aligns with modern customer needs.”

The Dialog Finance Virtual Debit Card is now available exclusively through the Genie mobile app, allowing customers to instantly generate, manage, and control their cards from a single interface. This milestone further solidifies Dialog Finance’s leadership in delivering customer-centric, innovation-led digital payment solutions in Sri Lanka.

Dialog Finance PLC, a subsidiary of Dialog Axiata PLC, is a licensed finance company regulated by the Central Bank of Sri Lanka. The Company offers a range of digital-first financial solutions to individuals, businesses, and corporations, and is backed by a strong Fitch Rating of AA (lka), reflecting its financial stability, robust governance, and high creditworthiness.