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‘IMF putting pressure on Sri Lanka to increase tax revenue against its better judgment’

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Waruna Deepthi Rajapaksha

by Sanath Nanayakkare

Waruna Deepthi Rajapaksha, the organizer for Gampaha Division from the United National Party (UNP) said recently at ‘Rathu Ira’ programme on Swarnawahini TV that IMF was putting pressure on Sri Lanka to raise tax revenue despite knowing the fact that it couldn’t be done so swiftly though it is critical.

“The IMF mission team led by Peter Breuer and Katsiaryna Svirydzenka, who visited Colombo from September 14 to 27 gave a press conference last week and said their focus was on restoring macroeconomic stability and debt sustainability in Sri Lanka. Peter Breuer said Sri Lanka has made commendable progress in implementing difficult but much-needed reforms. He said that Inflation is down from a peak of 70 percent in September 2022 to below 2 percent in September 2023, gross international reserves increased by $1.5 billion during March-June this year and shortages of essentials have eased. However, he said, revenue mobilization gains – while improved relative to last year – are expected to fall short of initial projections by nearly 15 percent by year end, partly due to economic factors. He particularly said that it is important to strengthen tax administration, remove tax exemptions, and actively eliminate tax evasion.”

“All these are logical remarks that the government understands. However, these targets can’t be achieved overnight because Sri Lanka is a democracy and not an autocracy. Tax files can’t be opened as fast as we like because of the legal environment in this country.

There are only a few voluntary tax payers in Sri Lanka. All taxes don’t effectively work like the direct PAYE tax because some profit making businesses and good income-earning individuals can’t be forced to pay taxes. When a new business or an individual is asked to pay tax, they have legal provisions where they have four opportunities to seek redress. They can go to tax arbitrators, the courts and even the appeal court to fight it and defer tax payments or avoid paying tax.

There are about 10 million businesses in the country that are functioning as registered businesses. Let’s say 5 million of them are inactive and can’t pay tax. What about the other 5 million businesses? 86% of the total tax revenue is collected from 494 institutions. This means there are many businesses that evade taxes. Lack of consensus and collaboration in the political landscape also make it hard to close such loopholes. I think the IMF understands it. That’s why the IMF said that tax administration in Sri Lanka needs to be strengthened. On their part what they said was logical and reasonable. But on the government’s part it is a process that takes time, “he said.



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EU’s new anti-greenwashing rules pose major challenge for Sri Lankan exporters

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This new directive applies to businesses across multiple sectors, of any size, that export products or services to the EU market.

Countdown to September 2026 begins

Sri Lankan exporters selling into Europe may soon face one of the most significant regulatory shifts in recent years as the European Union prepares to enforce sweeping new rules aimed at eliminating ‘misleading’ environmental and sustainability claims.

The regulation, known as the Empowering Consumers for the Green Transition Directive (EmpCo) – Directive (EU) 2024/825, will become fully enforceable across all EU member states from September 27, 2026. While the directive is primarily designed to protect European consumers from so-called ‘greenwashing,’ and it carries important implications for exporters worldwide, including those in Sri Lanka.

Compliance experts warn that many local businesses remain largely unaware of the new requirements despite their potential impact on market access, brand reputation, and regulatory compliance.

The directive introduces a simple but demanding principle: companies must be able to substantiate environmental and sustainability claims with credible evidence. Generic descriptions such as ‘eco-friendly,’ ‘green,’ ‘sustainable,’ ‘responsible,’ ‘carbon neutral,’ or ‘climate friendly’ may no longer be used freely unless they can be verified through reliable data and supporting documentation.

For Sri Lankan exporters, this represents a significant shift. Sustainability claims increasingly appear on product packaging, websites, social media campaigns, annual reports, tourism marketing materials, and corporate communications. Under the new framework, such claims could face scrutiny from regulators, consumers, retailers, and civil society groups.

The directive also places particular emphasis on future environmental commitments. Claims such as ‘Net Zero by 2040’ or ‘Carbon Neutral by 2030’ may require businesses to demonstrate clear implementation plans, measurable milestones, and systems for monitoring progress rather than relying on aspirational statements alone.

An environmental compliance expert told The Island Financial Review that this transforms sustainability from a communications exercise into a governance issue. “Responsibility will no longer rest solely with sustainability departments. Company directors, senior executives, marketing teams, procurement professionals, and compliance officers will all have roles to play in ensuring that public claims can withstand regulatory scrutiny. The potential costs of non-compliance are considerable. Under the directive, penalties may include fines of up to four percent of annual turnover generated within the relevant EU member state, restrictions on marketing activities, increased regulatory investigations, and challenges from consumer organisations and commercial partners.”

“The reputational consequences may prove even more damaging. In highly competitive export markets, trust has become a critical business asset. Companies found to be making unsubstantiated environmental claims could face long-term damage to relationships with buyers, retailers, and consumers.”

“The timing is particularly important for Sri Lankan businesses because compliance preparations, reporting frameworks and adjustments are needed before the enforcement date arrives.”

“Businesses supplying European markets are therefore being encouraged to begin assessing their exposure now rather than waiting until the last minute. Early preparation could help exporters safeguard market access, maintain buyer confidence, and strengthen their competitive position in an increasingly sustainability-conscious global economy.”

“For Sri Lanka’s export sector, the message from Europe is becoming increasingly clear: sustainability claims will no longer be judged by how compelling they sound, but by how convincingly they can be proven,” he said.

As the countdown to September 2026 begins, exporters may need to ask themselves a critical question: Are their sustainability claims ready for a new era of accountability?

By Sanath Nanayakkare

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University of West London opens Sri Lanka’s first full UK university branch campus

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The official signing ceremony between the University of West London, UK and ANC Education.

The University of West London (UWL) has formally opened the University of West London Sri Lanka Branch Campus, the country’s first full UK university branch campus, marking a landmark development in Sri Lanka’s higher education sector.

The University of West London Sri Lanka Branch Campus is designed to bring a UK university learning experience closer to students in Sri Lanka. The campus is operated by ANC Campus, a pioneer in the higher education sector in Sri Lanka with over two decades of experience in delivering internationally recognised education.

The University of West London Sri Lanka Branch Campus gives students the opportunity to study towards world-class UK degrees while remaining close to home. Academic delivery, assessment and quality assurance will be aligned with University of West London standards, with the University maintaining academic oversight of its courses and awards. Students will have access to UWL-approved programmes, academic support, learning resources and a campus environment designed to promote academic success, confidence and employability.

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Xiaomi Store powered by Abans opens at One Galle Face Mall

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Xiaomi Sri Lanka, marked a significant day in the brand’s local journey with the launch of the all-new Xiaomi 17T and the grand opening of the new Xiaomi Store powered by Abans at One Galle Face Mall, Lower Ground.

This occasion reflects the brand’s growing presence in the country and its commitment to bringing smarter technology, connected devices and immersive customer experiences closer to Sri Lankan consumers.

Held under the theme “Step into a smarter world with Xiaomi,” the launch event welcomed media, partners, technology enthusiasts and customers to experience Xiaomi’s latest innovation and wider smart ecosystem. The new store at One Galle Face Mall powered by Abans has been designed to give customers a hands-on experience across Xiaomi smartphones, smart home products, lifestyle technology and connected devices, supported by Abans’ strong retail presence and customer service network.

Commenting on the milestone, Kain Wang, Country Head, Xiaomi Sri Lanka, said, “17th June is a significant day for Xiaomi in Sri Lanka as we celebrate two important milestones together: the launch of the Xiaomi 17T and the opening of our new Xiaomi Store powered by Abans at One Galle Face Mall. This reflects the strength of Xiaomi’s journey in Sri Lanka and our continued commitment to offering innovation, performance and smarter lifestyle experiences to local consumers. With Xiaomi 17T, we are bringing advanced Leica imaging, powerful performance and long-lasting battery life to users who want to do more with their smartphones. At the same time, our new store creates a dedicated space for customers to experience the Xiaomi ecosystem in a more personal and engaging way.”

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