News
Budget 2026: Bankers present proposals to drive recovery
Sri Lanka’s banking sector has presented a set of far-reaching proposals for inclusion in the government’s Budget 2026.
The proposals, developed and submitted by the Sri Lanka Banks’ Association (SLBA), on behalf of all licensed commercial banks, were handed over to Deputy Minister of Finance, Planning and Economic Development Dr. Anil Jayantha Fernando at the Presidential Secretariat recently.
The submission underscores the critical role of banks in rebuilding economic resilience, restoring investor confidence and accelerating growth. The recommendations are designed not only to stabilise the financial system but also to expand opportunity for businesses, entrepreneurs and households nationwide.
The SLBA has called for urgent reforms to strengthen the financial sector’s capacity to support recovery. Proposals include targeted credit guarantee schemes to help revive distressed enterprises, accelerated tax deductibility for impairment provisions to encourage restructuring, and alignment of banking sector taxation with regional benchmarks. Excessive taxation, currently at 53% for domestic banks and 65% for foreign banks, is described as a barrier to competitiveness and capital formation. A fairer regime, the Association argued, would allow banks to direct resources towards lending for critical infrastructure and priority sectors.
Recognising the backbone role of SMEs in the economy, banks have urged the government to accelerate SME formalisation through mandatory VAT registration at concessional rates, the adoption of subsidised accounting software, SME-specific business bank accounts, and national-level financial literacy programmes. The SLBA also proposed mandatory Taxpayer Identification Numbers for all new accounts, and incentives for SMEs to digitise transactions, which would expand the tax base and improve credit access.
To drive growth and consumption, banks recommend rationalising indirect taxes to improve household disposable income and investor appetite, while broadening the tax net through digitisation and the use of proxy data such as utility and vehicle records. Simplifying compliance by treating withholding tax as a final tax, even at higher rates, was also suggested as a way to improve liquidity and overall revenue collection.
Calling for decisive investment in the country’s digital infrastructure, the SLBA proposed the creation of a national cloud framework to serve both public and private stakeholders, alongside tax incentives for fintech startups and local payment gateways. The Association also stressed the importance of levelling the playing field by applying VAT on global digital services, such as Google, Meta, PayPal, while advancing digital transactions by capping large cash payments and mandating electronic settlement of supplier, tax and utility bills. A public–private initiative on cybersecurity was also recommended to lower compliance costs and safeguard systemic resilience.
In proposals aimed at catalysing investment, the SLBA urged expedited restructuring of SriLankan Airlines to improve the country’s sovereign rating, which it argued is currently a major barrier to foreign direct investment. The creation of regional one-stop shops for regulatory approvals, reforms to facilitate Port City investments, and tax incentives for corporate bond issuances were among other measures advocated.
Banks also underlined the urgent need to mobilise capital for sustainable growth, recommending tax exemptions for green lending and the issuance of tax-free green bonds. Parallel proposals called for tax-free public–private partnership bonds to fund infrastructure and long-term development needs.
In a clear message of partnership, the SLBA proposed closer collaboration between government, regulators and the financial sector to deliver structural reforms. Suggested measures include integrating ports, customs, banks and revenue authorities into a unified digital platform to improve valuations and tax transparency, and creating a national data repository for climate and sustainability analytics.
Sectoral initiatives, including long-term funding for tea replanting and agricultural mechanisation, were also featured, reflecting the Association’s recognition of the need to modernise and future-proof Sri Lanka’s traditional industries.
Commenting on the submission, the SLBA said the financial services industry is ready to partner the government in shaping a resilient, inclusive and digitally empowered economy. “These proposals are designed to address immediate fiscal challenges while laying the foundation for sustainable growth. We believe this budget can be a turning point for the country, and the banking sector stands committed to play its part,” the Association noted.
News
Pakistan naval trio arrives at Colombo Port
In a display of naval tradition, the Sri Lanka Navy formally welcomed the Pakistan Navy Ships ‘PNS Taimur’ and ‘PNS Aslat’, alongside the submarine ‘PNS/M Hangor’, arrived at the Port of Colombo on 01 Jun 26.
The Pakistan naval units made port in Sri Lanka for a goodwill visit as well as replenishment.
The visiting naval assets are commanded by a lineup of naval officers, with Captain Niamat Saeed Khan (‘PNS Taimur’), Captain Nadir Mateen Afridi (‘PNS Aslat’), and Captain Uzair Farooq (‘PNS/M Hangor’).
During their stay in Sri Lanka, the crew members of the visiting ships and submarine are scheduled to tour several key locations across the country.
Concluding the visit, the Pakistan naval units will engage in a Passage Exercise (PASSEX) with the Sri Lanka Navy off the west coast.
News
IMF turning a blind eye to NPP corruption: Opp.
The People’s United Opposition yesterday (01) alleged that the International Monetary Fund (IMF) had turned a blind eye to serious corruption allegations against the NPP government and was going ahead with the USD 2.9 bn loan in terms of the Extended Fund Facility (EFF) programme, finalised in 2023.
Addressing the regular weekly media briefing at the Flower Road Office of former President Ranil Wickremesinghe, former Ministers Prof. G. L. Peiris and Patali Champika Ranawaka questioned the failure on the part of the IMF to act in spite of the NPP government engaging in open corrupt practices, contrary to the terms and conditions of the agreement/understanding with the lending agency.
The media was told that the IMF couldn’t absolve itself of the responsibility for the actions of the government, especially because Sri Lanka, experiencing severe economic difficulties, was receiving loans from IMF at over 8%. Ex-parliamentarian Ranawaka pointed out that what Sri Lanka received from the IMF was not JAICA-type soft loans and the country was further burdened.
Prof. Peiris and Ranawaka alleged that the IMF appeared to have chosen not to take up the serious and growing accusations, particularly over coal and fuel scams that caused massive losses. They claimed the government had taken decisions at the expense of the country but for the benefit of certain businessmen close to them.
Both Prof. Peiris and Ranawaka explained the circumstances under which certain persons and companies received privileged status to import very costly vehicles and even helicopters and aircraft as the government
wasted precious foreign reserves for the benefit of friends. Ranawaka named two companies that benefited from government actions while alleging that those engaged in lucrative coal and fuel business made a killing.
They pointed out that the IMF released the latest USD 695 mn amidst stepped up serious allegations against the government. (SF)
News
Shavendra tells Beijing meet Sri Lanka should not become an arena for geopolitical rivalry among major powers
Former Commander of Sri Lanka Army with possibly the best battlefield record, having recovered the most amount of enemy occupied territory by troops he led from the front in the Vanni theatre of operations (2007-2009), General Shavendra Silva recently discussed growing challenges faced by smaller countries, like Sri Lanka, in what he called the evolving global environment.
Stressing that responsibilities must be shared across all states, the former Commander of the Sri Lanka Army told the 5th edition of the Wanshou Dialogue on Global Security in Beijing: “Major powers bear a special responsibility to exercise strategic restraint, avoid coercive practices, uphold international law, and contribute toward global stability rather than fragmentation.
Emerging and middle powers have an increasingly important role as bridge builders promoting dialogue, cooperation, and institutional reform.
For countries such as Sri Lanka, the path forward lies in principled and balanced diplomacy.
This requires maintaining constructive relations with all nations while safeguarding sovereignty, strategic independence, and national interests.
Sri Lanka has consistently maintained that its territory should not become an arena for geopolitical rivalry or military confrontation among larger powers.
Instead, our focus remains on strengthening national resilience through economic development, institutional stability, maritime awareness, modern defence capabilities, and agile diplomacy.
Credible domestic institutions, accountable governance, and national cohesion ultimately strengthen sovereignty while reducing opportunities for external interference.”
Referring to his service as Ambassador and Deputy Permanent Representative of Sri Lanka to the UN in New York, General Silva said that his engagements at the UN and other international forums reinforced the importance of defending national interests while remaining committed to reconciliation, development, and peaceful coexistence.
The celebrated battlefield commander discussed the transformation of global security, the future direction of the international order and the responsibilities of states in this transitional era. Silva said: “Today, security threats extend far beyond conventional warfare.
Cyber threats, terrorism, disinformation, economic coercion, artificial intelligence, and the weaponisation of technology increasingly influence global stability. At the same time, climate change, pandemics, food insecurity, and economic disruptions have demonstrated how closely national security and human security are now interconnected.
For Sri Lanka, located at the centre of the Indian Ocean along one of the world’s most important maritime trade routes, these developments carry direct strategic significance. Sri Lanka’s own experience offers valuable lessons.
The defeat of the LTTE, in 2009 demonstrated the importance of decisive state action against terrorism, while also revealing how modern conflicts become internationalised through financing networks, propaganda, illicit arms flows, and external geopolitical pressures.
The post-conflict period further reinforced the importance of reconciliation, economic recovery, institutional rebuilding, and long-term national resilience.
Smaller states increasingly face pressures arising from great-power rivalry, economic dependency, and strategic competition.
Sri Lanka has, therefore, consistently sought to maintain strategic balance while safeguarding sovereignty and constructive engagement with all partners.
China has remained an important development and economic partner for Sri Lanka over many decades. The relationship, strengthened through the 1952 Rubber-Rice Pact, expanded significantly in the post-war period through cooperation in infrastructure, connectivity, logistics, energy, and economic recovery. Projects associated with the Belt and Road Initiative have contributed to Sri Lanka’s development, regional connectivity, and post-crisis resilience. China also extended support during the COVID-19 pandemic and Sri Lanka’s recent economic stabilisation efforts.
The future international order must be shaped not by confrontation or exclusive blocs, but through pragmatic cooperation, institutional reform, and balanced multilateral engagement.
International institutions, particularly the United Nations system, must evolve to better reflect contemporary geopolitical realities and the growing voice of the Global South.
Without greater inclusivity and legitimacy, multilateral institutions risk losing effectiveness in addressing increasingly complex global challenges.
Equally important is preserving a rules based maritime order grounded in international law, particularly the principles of the United Nations Convention on the Law of the Sea.
The international community must also establish clearer norms governing emerging technologies, cyber operations, artificial intelligence, autonomous weapons systems, and outer space security.
Sri Lanka’s recent economic stabilisation efforts further demonstrated that internal resilience is essential for maintaining strategic autonomy and an independent foreign policy.
It is also an opportunity to build a more inclusive, balanced, and resilient international order capable of responding to the realities of the 21st century.
-
News4 days agoIMF urges Lanka not to meddle with exchange rate
-
Business5 days agoSri Lanka’s construction industry losing ground while no one watches
-
News4 days agoState of emergency extended
-
Business2 days agoIMF’s unstated rate:Sri Lanka’s $695m loan costs about 5.33% per annum
-
Midweek Review7 days agoIsraeli-US aggression won’t go unanswered -Iranian Ambassador
-
Features5 days agoThe Division Bell Mystery
-
News2 days agoUNP challenges NPP move to amend Vihara – Devalagam Act
-
News6 days agoRTI query of Ditwah funds: Presidential Secretariat mum on key questions
