News
Accusations reiterated, explanation sought from FM
Tax evasion:
By Shamindra Ferdinando
SLPP MP Mahindananda Aluthgamage yesterday (25) said the Finance Ministry owed an explanation regarding its failure to regulate chartered accountants to increase state revenue.
The former minister said so when The Island asked whether the Finance Ministry had cared to verify accusations he made in Parliament on 20 Sept., about large-scale tax evasion and the role played by some chartered accountants/tax consultants in the racket.
It was common knowledge that when a tax return was submitted through a firm of chartered accountants the Inland Revenue officers hardly asked any questions, MP Aluthgamage said.
Aluthgamage said that he expected the Finance Ministry and other relevant institutions to get in touch with him. “However, they hadn’t contacted me, though the Finance Ministry on Sept. 26 assured that the Parliament would be briefed on the developments and action taken as regards the accusations within a month,” he said.
Pointing out that the promised report hadn’t been submitted to Parliament, Aluthgamage said that in spite of the financial crisis those responsible continued to evade the contentious issues at hand.
The MP said that he wouldn’t withdraw the accusations he made in Parlia-ment on Sept 20 under any circumstances. The Finance Ministry should either prove me wrong or take remedial measures as soon as possible, the MP said, urging the powers that be to address the issues at hand or face the consequences.
Referring to what he called two glaring cases of tax evasion involving prominent businessmen, MP Aluthgamage said that the Finance Ministry should go the whole hog. The situation was so bad the government couldn’t ignore the urgent need for overall reforming of the tax collecting structure, the ex-minister said. Reiterating the pivotal importance in regulating chartered accountants, lawmaker Aluthgamage revealed an instance Rs 35 bn was shown as Rs 5 bn.
President Ranil Wickremesinghe holds the finance portfolios whereas Ranjith Siyambalapitiya and Shehan Semasinghe serves as State Finance Ministers. SLFPer Siyambalapitiya is responsible for revenue collection.
State Minister Siyambalapitiya on Sept. 26 requested a comprehensive report from the Customs, Inland Revenue Department and Excise Department as regards the issues raised by MP Aluthgamage in terms of Standing Orders (27) 2. Requesting them to submit their report within two weeks, MP Siyambalapitiya assured that the parliament would be briefed within a month. Instructions were issued at a meeting chaired by State Minister Siyambalapitiya at the Finance Ministry. Among those present were Inland Revenue chief D.R.S. Hapuaarachchi, Director General Customs P.B.S.C. Nonis and Commissioner General, Excise M.J. Gunasiri.
Referring to staff-level agreement Sri Lanka reached with the International Monetary Fund (IMF), MP Aluthgamage said that the government was taking measures to enhance revenue. The parliament endorsed ‘Social Security Contribution Levy’ on Sept 08 with 91 members voting for and 10 against, the former minister said, adding that it was meant to annually collect Rs 140 bn. “Taxes are necessary. All of us understand difficulties experienced by vast majority of people struggling to make ends meet. Indirect taxes are imposed on them whereas those who should pay taxes continue to evade the taxman,” MP Aluthgamage said.
MP Aluthgamage said that the current tax appeal system should be examined as interested parties continued to exploit the loopholes for their advantage. The former minister said that the reports released by parliamentary watchdog committees, COPE (Committee on Public Enterprises), COPA (Committee on Public Accounts) and COPF (Committee on Public Finance) since the last general election revealed how the government deprived itself of the revenue by allowing interested parties to exploit the tax collection system.Lawmaker Aluthgamage said that the media recently reported a group of Inland Revenue officers complaining to the police regarding his criticism. According to Aluthgamage, the police never sought a statement from him. In fact, it was not a matter for the police, the MP declared, adding that the Finance Ministry should brief the Parliament and take whatever measures necessary to streamline tax collection.
By Shamindra Ferdinando
Iran has sought the Indian intervention, at the highest level, to provide lifesaving support to the crews of empty Iranian vessels stranded just outside Sri Lanka’s 12-nautical mile territorial waters off Galle.
Sources familiar with the issue said that Iran had brought the developing situation to the attention of New Delhi as the crews of almost 20 vessels, included Indian nationals. Sources stressed that the group of vessels that unloaded crude oil a couple of months back were now stranded within Sri Lanka’s Exclusive Economic Zone (EEZ).
The US Navy torpedoed an unarmed Iran frigate, returning from India, on 04 March, 2026, about 19 nautical miles off the Galle coast. The unprovoked attack killed nearly 100 Iranians.
The Iranian Embassy in Colombo has inquired from the Indian High Commission of their response to the situation, sources said. The US has issued a global warning against providing food, water, medicine and other services to the Iranian vessels. The outcome of Iran-India talks on the issue at hand was not known, though sources asserted India may not throw its weight behind Iranian efforts to address the issue.
Responding to The Island queries, sources said both Sri Lanka and India were in a dilemma due to the US warning. India couldn’t ignore the plight of the Indian crew members and the Iranian vessels in its backyard.
The Sri Lankan government remains tight-lipped about the vessels stranded in its EEZ. Our efforts to elicit a response from relevant authorities were in vain. In addition to Indians, there are Bangladeshis among the crew members. Iran has explicitly stated the responsibilities of the countries concerned to provide assistance in terms of international law.
The Iranian position was articulated by its Ambassador to Sri Lanka, Dr.Alireza Delkhosh, recently. In a special statement, Ambassador Delkhosh emphasised that in terms of the Convention on the Law of the Sea (Article 98) as well as SOLAS and SAR
Conventions, Sri Lanka couldn’t refrain from providing the needs of the Iranian vessels stranded in its EEZ.
SLMC leader Rauff Hakeem lambasted the NPP government in Parliament for failing to provide assistance to the Iranian ships. The former Minister alleged that the government was simply carrying out dictates of the US. He strongly criticised the way Foreign Minister Vijitha Herath was handling the issue.
MP Namal Rajapaksa, who is in remand custody over the controversial Airbus deal, was further remanded until October 27 by the Colombo Magistrate’s Court yesterday (13).
Colombo Chief Magistrate Asanga S. Bodaragama made the order after considering submissions by officers of the Commission to Investigate Allegations of Bribery or Corruption and lawyers representing Rajapaksa.
Sri Lanka’s economy is expected to sustain its recovery over the next two years, although growth is projected to moderate amid mounting global uncertainties, according to the International Monetary Fund’s (IMF) latest World Economic Outlook.
In its World Economic Outlook 2026: Resilience Under Strain, Urgent Choices, the IMF projects Sri Lanka’s economy to expand by 4% in 2026, slowing to 3.7% in 2027, following estimated growth of 5% in 2025.
Inflation, meanwhile, is forecast to rise to 5.3% in 2026 and 5.4% in 2027, reversing the average deflation rate of 0.5% recorded in 2025.
Unemployment is expected to remain steady at 3.9% throughout the forecast period.
The projections come amid growing pressure on the global economy from the ongoing conflict in the Middle East, elevated energy prices, geopolitical tensions and trade disruptions.
Sri Lanka’s external position is also expected to weaken, with the current account balance projected to shift from a surplus of 1.6% of gross domestic product (GDP) in 2025 to deficits of 0.5% in 2026 and 0.3% in 2027.
The IMF’s outlook points to continued economic expansion in Sri Lanka, but with slower growth, rising inflation and a narrowing external surplus giving way to current account deficits over the forecast period.
Heavy showers above 100 mm are likely at some places in the Western, Sabaragamuwa, Southern, Central, and North-western provinces and in Anuradhapura district.
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