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Will the 2022 Budget herald changes for the better?

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By Sanjeewa Jayaweera

The newly appointed Finance Minister will present the Budget for 2022 on November 12, 2022. Over the years, the public has come to expect concessions whenever a Budget is presented. The corporate sector usually canvasses for the corporation tax rate to be reduced and various incentives to facilitate new investments and expand current operations. Those employed in the private sector hope that the single person tax-free allowance will be increased and a reduction in the income tax rate. Those employed in the public sector and those who have retired hope for salary and pension increments whilst consumers pray that the Value-Added Tax (VAT) rate and other taxes and import duties will be reduced so that prices of goods might be reduced. Only those who consume liquor and smoke cigarettes know that they will not receive any “gifts” from the Budget!

The tax concessions granted soon after President Gotabaya Rajapaksa was elected delivered most of the manifesto promises. The VAT rate was reduced from 15 percent to eight per cent, whilst the Nation Building Tax (NBT) levied at two per cent was abolished. In addition, the single person tax-free tax allowance for a year given to individuals, was increased to Rs. 3 million from Rs. 500,000. To be precise, for those who received employment income, the tax-free allowance was Rs. 1.2 million before the increase. Employees subjected to Pay As You Earn (PAYE) tax which required the employer to deduct the tax when paying salaries, were granted an exemption and told to pay the tax directly to the Department of Inland Revenue every quarter. The five per cent withholding tax (WHT) deducted when banks and finance companies paid interest income was abolished. The tax was only to be paid in case the total income exceeded Rs. 3 million for the year. The tax if due was to be remitted every quarter. The corporation tax rate was reduced to 18 per cent from 28 per cent for those engaged in manufacturing. Businesses whose turnover was less than Rs. 300 million for a year were exempted from VAT. The turnover threshold for VAT exemption previously was Rs. 30 million.

The GOSL did not disclose the anticipated reduction in revenue due to these concessions, nor did they announce how they intended to bridge the shortfall in revenue. However, there was an assumption that the tax concessions granted would increase aggregate demand for goods and services and increase the overall size of the economy.

Although many Sri Lankans were happy with the concessions granted, those knowledgeable in economics and finance were surprised and concerned. In a country where most people are exempted from direct taxation, and many required to pay, did not comply with the law, these concessions were considered illogical and ill-timed.

International rating agencies were swift to react to these concessions by downgrading the credit rating of the country. The credit rating applies to the outlook on Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR). The rating agencies justified their negative sentiment by stating that the significant revenue reduction would weaken the ability of the GOSL to repay debt. The Treasury and the Central Bank of Sri Lanka released statements sharply rebuking the rating agencies for the downgrade.

Those surprised and concerned by these concessions were so because there was no logic and was in essence against economic and financial commonsense. In an article of mine published in the Sunday Island of January 12, 2020, captioned “Sri Lanka’s Tax Conundrum”, I did raise some questions about the assumption that the tax concessions would benefit the poor and drive aggregate demand.

The GOSL was reducing revenue when there was a significant budget deficit and accentuating the problem; there was no action to reduce public expenditure. Instead, it was announced that 100,000 unemployed graduates are to be employed in the already bloated state sector. In addition, the country’s accumulated debt was high as successive governments since independence had acted irresponsibly.

The GOSL is partly correct in attributing the current economic crisis to the pandemic. There is no doubt that there has been a severe economic upheaval worldwide due to the pandemic. Most economies have contracted to cause unemployment and a lot of misery to many. Having said that, many developed and developing countries have begun to bounce back, and there is optimism that we will overcome the pandemic. However, in Sri Lanka, the economy has still not started to recover. We are facing multiple challenges on several fronts. Government revenue reduced significantly due to the various tax concessions granted in 2020 has been further reduced as the economy has contracted. The country is in the midst of a severe foreign exchange crisis. The majority of consumers are finding it challenging to manage as prices of commodities are skyrocketing. That this is a global problem is of no comfort to those who cannot finance their expenses.

In light of the challenges mentioned above, what can we expect from the 2022 Budget? According to press reports, the newly appointed Finance Minister is quoted to have said that “There is nothing to give to the public but only to take back some of the concessions given.” I may not have repeated what he has stated precisely, but I hope I have accurately conveyed his message. As usual, the comment has drawn criticism from both the Opposition parties and some in the government. Those in the Opposition who have experience in governing the country, know well that there is no alternative. On the other hand, those who have never been involved in governing the country and those driven by misplaced ideology will protest and mislead the public.

I, for one, agree with what the Finance Minister is quoted to have said. There is a need to roll back all tax concessions granted in 2020 and reduce public expenditure. I am confident that many would disagree with me and say that this is not the time to tighten our belts. I agree that increasing tax rates and a cut in public expenditure would result in hardship to many. However, there is no alternative. The Central Bank of Sri Lanka (CBSL) has been printing money in the last few years. A retired Deputy Governor of the CBSL has stated that the recently resigned Governor, Professor Lakshma, converted the CBSL to a printing press! Suppose corrective action is not taken this time around to introduce much needed economic reforms, revenue-enhancing measures and cut down expenditure; the GOSL may well be taking the country down a path that has impacted Zimbabwe and Lebanon.

I hope the President, the Finance Minister, the Prime Minister, and the Cabinet have the foresight and courage to introduce meaningful changes in managing the economy and finances of our country. That we all need to tighten our belts considerably is a given. However, it is time that difficult and unpopular decisions are taken for the country’s medium and long-term good, and winning the next election should not be a consideration.

A significant quote attributed to the late Singaporean Prime Minister Lee Kuan Yew, who said that “elections in Sri Lanka is an auction of non-existent resources.” Maybe we need to now replace the word “Elections” with “Budget.”



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The invisible crisis: How tour guide failures bleed value from every tourist

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(Article 04 of the 04-part series on Sri Lanka’s tourism stagnation)

If you want to understand why Sri Lanka keeps leaking value even when arrivals hit “record” numbers, stop staring at SLTDA dashboards and start talking to the people who face tourists every day: the tour guides.

They are the “unofficial ambassadors” of Sri Lankan tourism, and they are the weakest, most neglected, most dysfunctional link in a value chain we pretend is functional. Nearly 60% of tourists use guides. Of those guides, 57% are unlicensed, untrained, and invisible to the very institutions claiming to regulate quality. This is not a marginal problem. It is a systemic failure to bleed value from every visitor.

The Invisible Workforce

The May 2024 “Comprehensive Study of the Sri Lankan Tour Guides” is the first serious attempt, in decades, to map this profession. Its findings should be front-page news. They are not, because acknowledging them would require admitting how fundamentally broken the system is. The official count (April 2024): SLTDA had 4,887 licensed guides in its books:

* 1,892 National Guides (39%)

* 1,552 Chauffeur Guides (32%)

* 1,339 Area Guides (27%)

* 104 Site Guides (2%)

The actual workforce: Survey data reveals these licensed categories represent only about 75% of people actually guiding tourists. About 23% identify as “other”; a polite euphemism for unlicensed operators: three-wheeler drivers, “surf boys,” informal city guides, and touts. Adjusted for informal operators, the true guide population is approximately 6,347; 32% National, 25% Chauffeur, 16% Area, 4% Site, and 23% unlicensed.

But even this understates reality. Industry practitioners interviewed in the study believe the informal universe is larger still, with unlicensed guides dominating certain tourist hotspots and price-sensitive segments. Using both top-down (tourist arrivals × share using guides) and bottom-up (guides × trips × party size) estimates, the study calculates that approximately 700,000 tourists used guides in 2023-24, roughly one-third of arrivals. Of those 700,000 tourists, 57% were handled by unlicensed guides.

Read that again. Most tourists interacting with guides are served by people with no formal training, no regulatory oversight, no quality standards, and no accountability. These are the “ambassadors” shaping visitor perceptions, driving purchasing decisions, and determining whether tourists extend stays, return, or recommend Sri Lanka. And they are invisible to SLTDA.

The Anatomy of Workforce Failure

The guide crisis is not accidental. It is the predictable outcome of decades of policy neglect, regulatory abdication, and institutional indifference.

1. Training Collapse and Barrier to Entry Failure

Becoming a licensed National Guide theoretically requires:

* Completion of formal training programmes

* Demonstrated language proficiency

* Knowledge of history, culture, geography

* Passing competency exams

In practice, these barriers have eroded. The study reveals:

* Training infrastructure is inadequate and geographically concentrated

* Language requirements are inconsistently enforced

* Knowledge assessments are outdated and poorly calibrated

* Continuous professional development is non-existent

The result: even licensed guides often lack the depth of knowledge, language skills, or service standards that high-yield tourists expect. Unlicensed guides have no standards at all. Compare this to competitors. In Mauritius, tour guides undergo rigorous government-certified training with mandatory refresher courses. The Maldives’ resort model embeds guide functions within integrated hospitality operations with strict quality controls. Thailand has well-developed private-sector training ecosystems feeding into licensed guide pools.

2. Economic Precarity and Income Volatility

Tour guiding in Sri Lanka is economically unstable:

* Seasonal income volatility: High earnings in peak months (December-March), near-zero in low season (April-June, September)

* No fixed salaries: Most guides work freelance or commission-based

* Age and experience don’t guarantee income: 60% of guides are over 40, but earnings decline with age due to physical demands and market preference for younger, language-proficient guides

* Commission dependency: Guides often earn more from commissions on shopping, gem purchases, and restaurant referrals than from guiding fees

The commission-driven model pushes guides to prioritise high-commission shops over meaningful experiences, leaving tourists feeling manipulated. With low earnings and poor incentives, skilled guides exist in the profession while few new entrants join. The result is a shrinking pool of struggling licensed guides and rising numbers of opportunistic unlicensed operators.

3. Regulatory Abdication and Unlicensed Proliferation

Unlicensed guides thrive because enforcement is absent, economic incentives favour avoiding fees and taxes, and tourists cannot distinguish licensed professionals from informal operators. With SLTDA’s limited capacity reducing oversight, unregistered activity expands. Guiding becomes the frontline where regulatory failure most visibly harms tourist experience and sector revenues in Sri Lanka.

4. Male-Dominated, Ageing, Geographically Uneven Workforce

The guide workforce is:

* Heavily male-dominated: Fewer than 10% are women

* Ageing: 60% are over 40; many in their 50s and 60s

* Geographically concentrated: Clustered in Colombo, Galle, Kandy, Cultural Triangle—minimal presence in emerging destinations

This creates multiple problems:

* Gender imbalance: Limits appeal to female solo travellers and certain market segments (wellness tourism, family travel with mothers)

* Physical limitations: Older guides struggle with demanding itineraries (hiking, adventure tourism)

* Knowledge ossification: Ageing workforce with no continuous learning rehashes outdated narratives, lacks digital literacy, cannot engage younger tourist demographics

* Regional gaps: Emerging destinations (Eastern Province, Northern heritage sites) lack trained guide capacity

1. Experience Degradation Lower Spending

Unlicensed guides lack knowledge, language skills, and service training. Tourist experience degrades. When tourists feel they are being shuttled to commission shops rather than authentic experiences, they:

* Cut trips short

* Skip additional paid activities

* Leave negative reviews

* Do not return or recommend

The yield impact is direct: degraded experiences reduce spending, return rates, and word-of-mouth premium.

2. Commission Steering → Value Leakage

Guides earning more from commissions than guiding fees optimise for merchant revenue, not tourist satisfaction.

This creates leakage: tourism spending flows to merchants paying highest commissions (often with foreign ownership or imported inventory), not to highest-quality experiences.

The economic distortion is visible: gems, souvenirs, and low-quality restaurants generate guide commissions while high-quality cultural sites, local artisan cooperatives, and authentic restaurants do not. Spending flows to low-value, high-leakage channels.

3. Safety and Security Risks → Reputation Damage

Unlicensed guides have no insurance, no accountability, no emergency training. When tourists encounter problems, accidents, harassment, scams, there is no recourse. Incidents generate negative publicity, travel advisories, reputation damage. The 2024-2025 reports of tourists being attacked by wildlife at major sites (Sigiriya) with inadequate safety protocols are symptomatic. Trained, licensed guides would have emergency protocols. Unlicensed operators improvise.

4. Market Segmentation Failure → Yield Optimisation Impossible

High-yield tourists (luxury, cultural immersion, adventure) require specialised guide-deep knowledge, language proficiency, cultural sensitivity. Sri Lanka cannot reliably deliver these guides at scale because:

* Training does not produce specialists (wildlife experts, heritage scholars, wellness practitioners)

* Economic precarity drives talent out

* Unlicensed operators dominate price-sensitive segments, leaving limited licensed capacity for premium segments

We cannot move upmarket because we lack the workforce to serve premium segments. We are locked into volume-chasing low-yield markets because that is what our guide workforce can provide.

The way forward

Fixing Sri Lanka’s guide crisis demands structural reform, not symbolic gestures. A full workforce census and licensing audit must map the real guide population, identify gaps, and set an enforcement baseline. Licensing must be mandatory, timebound, and backed by inspections and penalties. Economic incentives should reward professionalism through fair wages, transparent fees, and verified registries. Training must expand nationwide with specialisations, language standards, and continuous development. Gender and age imbalances require targeted recruitment, mentorship, and diversified roles. Finally, guides must be integrated into the tourism value chain through mandatory verification, accountability measures, and performancelinked feedback.

The Uncomfortable Truth

Can Sri Lanka achieve high-value tourism with a low-quality, largely unlicensed guide workforce? The answer is NO. Unambiguously, definitively, NO. Sri Lanka’s guides shape tourist perceptions, spending, and satisfaction, yet the system treats them as expendable; poorly trained, economically insecure, and largely unregulated. With 57% of tourists relying on unlicensed guides, experience quality becomes unpredictable and revenue leaks into commission-driven channels.

High-yield markets avoid destinations with weak service standards, leaving Sri Lanka stuck in low-value, volume tourism. This is not a training problem but a structural failure requiring regulatory enforcement, viable career pathways, and a complete overhaul of incentives. Without professionalising guides, high-value tourism is unattainable. Fixing the guide crisis is the foundation for genuine sector transformation.

The choice is ours. The workforce is waiting.

This concludes the 04-part series on Sri Lanka’s tourism stagnation. The diagnosis is complete. The question now is whether policymakers have the courage to act.

For any concerns/comments contact the author at saliya.ca@gmail.com

(The writer, a senior Chartered Accountant and professional banker, is Professor at SLIIT, Malabe. The views and opinions expressed in this article are personal.)

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Recruiting academics to state universities – beset by archaic selection processes?

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by Kaushalya Perera

Time has, by and large, stood still in the business of academic staff recruitment to state universities. Qualifications have proliferated and evolved to be more interdisciplinary, but our selection processes and evaluation criteria are unchanged since at least the late 1990s. But before I delve into the problems, I will describe the existing processes and schemes of recruitment. The discussion is limited to UGC-governed state universities (and does not include recruitment to medical and engineering sectors) though the problems may be relevant to other higher education institutions (HEIs).

How recruitment happens currently in SL state universities

Academic ranks in Sri Lankan state universities can be divided into three tiers (subdivisions are not discussed).

* Lecturer (Probationary)

recruited with a four-year undergraduate degree. A tiny step higher is the Lecturer (Unconfirmed), recruited with a postgraduate degree but no teaching experience.

* A Senior Lecturer can be recruited with certain postgraduate qualifications and some number of years of teaching and research.

* Above this is the professor (of four types), which can be left out of this discussion since only one of those (Chair Professor) is by application.

State universities cannot hire permanent academic staff as and when they wish. Prior to advertising a vacancy, approval to recruit is obtained through a mind-numbing and time-consuming process (months!) ending at the Department of Management Services. The call for applications must list all ranks up to Senior Lecturer. All eligible candidates for Probationary to Senior Lecturer are interviewed, e.g., if a Department wants someone with a doctoral degree, they must still advertise for and interview candidates for all ranks, not only candidates with a doctoral degree. In the evaluation criteria, the first degree is more important than the doctoral degree (more on this strange phenomenon later). All of this is only possible when universities are not under a ‘hiring freeze’, which governments declare regularly and generally lasts several years.

Problem type 1

Archaic processes and evaluation criteria

Twenty-five years ago, as a probationary lecturer with a first degree, I was a typical hire. We would be recruited, work some years and obtain postgraduate degrees (ideally using the privilege of paid study leave to attend a reputed university in the first world). State universities are primarily undergraduate teaching spaces, and when doctoral degrees were scarce, hiring probationary lecturers may have been a practical solution. The path to a higher degree was through the academic job. Now, due to availability of candidates with postgraduate qualifications and the problems of retaining academics who find foreign postgraduate opportunities, preference for candidates applying with a postgraduate qualification is growing. The evaluation scheme, however, prioritises the first degree over the candidate’s postgraduate education. Were I to apply to a Faculty of Education, despite a PhD on language teaching and research in education, I may not even be interviewed since my undergraduate degree is not in education. The ‘first degree first’ phenomenon shows that universities essentially ignore the intellectual development of a person beyond their early twenties. It also ignores the breadth of disciplines and their overlap with other fields.

This can be helped (not solved) by a simple fix, which can also reduce brain drain: give precedence to the doctoral degree in the required field, regardless of the candidate’s first degree, effected by a UGC circular. The suggestion is not fool-proof. It is a first step, and offered with the understanding that any selection process, however well the evaluation criteria are articulated, will be beset by multiple issues, including that of bias. Like other Sri Lankan institutions, universities, too, have tribal tendencies, surfacing in the form of a preference for one’s own alumni. Nevertheless, there are other problems that are, arguably, more pressing as I discuss next. In relation to the evaluation criteria, a problem is the narrow interpretation of any regulation, e.g., deciding the degree’s suitability based on the title rather than considering courses in the transcript. Despite rhetoric promoting internationalising and inter-disciplinarity, decision-making administrative and academic bodies have very literal expectations of candidates’ qualifications, e.g., a candidate with knowledge of digital literacy should show this through the title of the degree!

Problem type 2 – The mess of badly regulated higher education

A direct consequence of the contemporary expansion of higher education is a large number of applicants with myriad qualifications. The diversity of degree programmes cited makes the responsibility of selecting a suitable candidate for the job a challenging but very important one. After all, the job is for life – it is very difficult to fire a permanent employer in the state sector.

Widely varying undergraduate degree programmes.

At present, Sri Lankan undergraduates bring qualifications (at times more than one) from multiple types of higher education institutions: a degree from a UGC-affiliated state university, a state university external to the UGC, a state institution that is not a university, a foreign university, or a private HEI aka ‘private university’. It could be a degree received by attending on-site, in Sri Lanka or abroad. It could be from a private HEI’s affiliated foreign university or an external degree from a state university or an online only degree from a private HEI that is ‘UGC-approved’ or ‘Ministry of Education approved’, i.e., never studied in a university setting. Needless to say, the diversity (and their differences in quality) are dizzying. Unfortunately, under the evaluation scheme all degrees ‘recognised’ by the UGC are assigned the same marks. The same goes for the candidates’ merits or distinctions, first classes, etc., regardless of how difficult or easy the degree programme may be and even when capabilities, exposure, input, etc are obviously different.

Similar issues are faced when we consider postgraduate qualifications, though to a lesser degree. In my discipline(s), at least, a postgraduate degree obtained on-site from a first-world university is preferable to one from a local university (which usually have weekend or evening classes similar to part-time study) or online from a foreign university. Elitist this may be, but even the best local postgraduate degrees cannot provide the experience and intellectual growth gained by being in a university that gives you access to six million books and teaching and supervision by internationally-recognised scholars. Unfortunately, in the evaluation schemes for recruitment, the worst postgraduate qualification you know of will receive the same marks as one from NUS, Harvard or Leiden.

The problem is clear but what about a solution?

Recruitment to state universities needs to change to meet contemporary needs. We need evaluation criteria that allows us to get rid of the dross as well as a more sophisticated institutional understanding of using them. Recruitment is key if we want our institutions (and our country) to progress. I reiterate here the recommendations proposed in ‘Considerations for Higher Education Reform’ circulated previously by Kuppi Collective:

* Change bond regulations to be more just, in order to retain better qualified academics.

* Update the schemes of recruitment to reflect present-day realities of inter-disciplinary and multi-disciplinary training in order to recruit suitably qualified candidates.

* Ensure recruitment processes are made transparent by university administrations.

Kaushalya Perera is a senior lecturer at the University of Colombo.

(Kuppi is a politics and pedagogy happening on the margins of the lecture hall that parodies, subverts, and simultaneously reaffirms social hierarchies.)

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Talento … oozing with talent

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Talento: Gained recognition as a leading wedding and dance band

This week, too, the spotlight is on an outfit that has gained popularity, mainly through social media.

Last week we had MISTER Band in our scene, and on 10th February, Yellow Beatz – both social media favourites.

Talento is a seven-piece band that plays all types of music, from the ‘60s to the modern tracks of today.

The band has reached many heights, since its inception in 2012, and has gained recognition as a leading wedding and dance band in the scene here.

The members that makeup the outfit have a solid musical background, which comes through years of hard work and dedication

Their portfolio of music contains a mix of both western and eastern songs and are carefully selected, they say, to match the requirements of the intended audience, occasion, or event.

Although the baila is a specialty, which is inherent to this group, that originates from Moratuwa, their repertoire is made up of a vast collection of love, classic, oldies and modern-day hits.

The musicians, who make up Talento, are:

Prabuddha Geetharuchi:

Geilee Fonseka: Dynamic and charismatic vocalist

Prabuddha Geetharuchi: The main man behind the band Talento

(Vocalist/ Frontman). He is an avid music enthusiast and was mentored by a lot of famous musicians, and trainers, since he was a child. Growing up with them influenced him to take on western songs, as well as other music styles. A Peterite, he is the main man behind the band Talento and is a versatile singer/entertainer who never fails to get the crowd going.

Geilee Fonseka (Vocals):

A dynamic and charismatic vocalist whose vibrant stage presence, and powerful voice, bring a fresh spark to every performance. Young, energetic, and musically refined, she is an artiste who effortlessly blends passion with precision – captivating audiences from the very first note. Blessed with an immense vocal range, Geilee is a truly versatile singer, confidently delivering Western and Eastern music across multiple languages and genres.

Chandana Perera (Drummer):

His expertise and exceptional skills have earned him recognition as one of the finest acoustic drummers in Sri Lanka. With over 40 tours under his belt, Chandana has demonstrated his dedication and passion for music, embodying the essential role of a drummer as the heartbeat of any band.

Harsha Soysa:

(Bassist/Vocalist). He a chorister of the western choir of St. Sebastian’s College, Moratuwa, who began his musical education under famous voice trainers, as well as bass guitar trainers in Sri Lanka. He has also performed at events overseas. He acts as the second singer of the band

Udara Jayakody:

(Keyboardist). He is also a qualified pianist, adding technical flavour to Talento’s music. His singing and harmonising skills are an extra asset to the band. From his childhood he has been a part of a number of orchestras as a pianist. He has also previously performed with several famous western bands.

Aruna Madushanka:

(Saxophonist). His proficiciency in playing various instruments, including the saxophone, soprano saxophone, and western flute, showcases his versatility as a musician, and his musical repertoire is further enhanced by his remarkable singing ability.

Prashan Pramuditha:

(Lead guitar). He has the ability to play different styles, both oriental and western music, and he also creates unique tones and patterns with the guitar..

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