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CCC underscores importance of balanced tax policy

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The Ceylon Chamber of Commerce (CCC), through its Tax Steering Committee, has actively engaged with stakeholders on the proposed Inland Revenue (Amendment) Bill of 2026, recognising its potential implications for businesses and the broader economy. While acknowledging the importance of updating the tax framework, the Chamber’s efforts have focused on assessing the impact of the proposed amendments, highlighting several provisions that warrant closer attention.

CCC statement: “The Chamber Tax Steering Committee reviewed the proposed amendments and assessed their impact on business continuity, investment, taxpayer rights and Sri Lanka’s competitiveness. The Committee conducted a comprehensive evaluation, focusing on areas that could affect financing, compliance, and the overall business environment.

In addition, the Ceylon Chamber organised a seminar on 12 March 2026 at its auditorium, bringing together members, industry stakeholders, policymakers, and the regulator. The session provided participants with a detailed briefing on the proposed changes, clarified key provisions, and facilitated an open exchange of views between the private sector and authorities, especially on areas of concern raised by the membership.

Building on these engagements, the Tax Steering Committee submitted detailed recommendations to the Ministry of Finance, outlining the potential impact of the proposed amendments and their implications for the Government’s broader policy direction. Key recommendations included the following:

* Amendments to Thin Capitalisation Rules: Maintaining the exclusion of negative reserves in gearing calculations to avoid adding tax burdens on financially distressed companies, and calling for the allowability of finance cost on all genuine commercial borrowings to protect legitimate financing.

* Restrictions on Submission of Evidence: Introducing flexibility in the proposed 6 to 9 month timeline for submitting information to the Commissioner General, allowing taxpayers to provide verified evidence beyond this period to balance administrative efficiency with fairness.

* Penalties for Compliance Lapses: Ensuring that enforcement measures remain proportionate, avoiding stringent penalties that include imprisonment, for minor compliance failures. The Chamber proposed relying on existing recovery mechanisms to safeguard investment confidence and fairness to taxpayers.

* Taxation of Insurance Businesses: Deferring amendments to Section 67 pending further consultation with the insurance industry and the regulator. Avoiding treating policyholder distributions as taxable income of insurers, and greater clarity in the application of adjustment provisions, particularly in light of IFRS 17 implementation.

* Discretionary powers of the Commissioner General: It should be clearly defined and guided by transparent rules to avoid uncertainty. While such powers are important for enforcement, they must be applied fairly, with proper safeguards, to ensure consistency and maintain taxpayer confidence.

The Chamber has also engaged directly with policymakers to ensure that provisions identified as those that could negatively impact business sentiment are either suitably amended during the Committee Stage or deferred for further consultation prior to implementation.

The Ceylon Chamber reiterates the importance of maintaining a stable, predictable, and investment-friendly tax framework, particularly at a time when Sri Lanka is seeking to strengthen economic recovery and attract private investment. It remains committed to a constructive, solutions-oriented engagement with policymakers, working collaboratively to refine and strengthen legislation in the public interest to ensure timely support and effective implementation of reforms. It will continue working closely with the Government and relevant authorities to support the development of a balanced and effective tax policy that promotes growth while safeguarding revenue objectives”.



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Meeting between Catholic religious leaders and President

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A meeting between President Anura Kumara Dissanayake and Catholic religious leaders, led by His Eminence Malcolm Cardinal Ranjith, Archbishop of Colombo, was held at the Presidential Secretariat on Thursday (10).

Special attention was given to the Government’s programme to strengthen coexistence, peace and reconciliation among all communities in the country and to ensure national unity by preventing any form of racist or religiously motivated hate activity.

The progress of investigations into the Easter Sunday attacks was also discussed.

Lengthy discussions were held on measures that could be taken to prevent environmental damage and destruction affecting the lives of the people.

The Catholic religious leaders commended the measures taken by the Government to safeguard trust among all communities and expressed their fullest support for these efforts.

The issues faced by Catholic communities, including infrastructure development in areas where Catholic people reside, as well as measures that should be taken to address these issues, were also discussed at length.

Rev. Fr. Cyril Gamini, Rev. Fr. Julian Patrick and other priests, as well as Deputy Minister of Religious and Cultural Affairs Muneer Mulaffer, President’s Senior Additional Secretary Roshan Gamage and others, were also present at the meeting.

President’s Media Division (PMD)

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Sri Lanka faces new grid challenge as rooftop solar surges: former CEB GM

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BY IfhAm NIzAm

Sri Lanka could soon face a new electricity-grid challenge—not from too little power, but from having too much solar generation in the wrong places and at the wrong times, a former Ceylon Electricity Board (CEB) General Manager told The Island.

The former CEB GM who insisted not to be named warned that the rapid growth of rooftop and utility-scale solar could place increasing pressure on CEB and LECO distribution feeders, substations and the national grid unless transmission, storage and grid-management systems are upgraded at the same pace.

“The issue is no longer simply how much solar we can install. The question is whether the grid can absorb those electrons when and where they are produced,” he told The Island.

He said Sri Lanka should learn from China and India, where the enormous expansion of renewable generation is now forcing policymakers to focus increasingly on storage, transmission capacity, intelligent dispatch and grid flexibility.

“China has already exceeded 1.28 TW of installed solar, while India’s grid-connected installed solar capacity stood at around 162.15 GW as of June 30, 2026. The difficult question now is what you actually do with so much solar when everyone is generating at almost the same time,” he said.

For Sri Lanka, he said, the warning is particularly relevant to the distribution network.

A feeder carrying a high concentration of rooftop solar can, during periods of strong sunshine and low local demand, move from the traditional one-way flow of electricity towards consumers to reverse power flow back towards the transformer and upstream network.

“That means the feeder is no longer simply a one-way road for electricity. At certain times of the day, it becomes a two-way road,” he said.

This can create voltage-rise, protection-coordination and transformer-loading issues and could eventually limit the amount of additional rooftop solar that can safely be connected to particular feeders.

“What matters is where those megawatts are connected,” he told The Island.

He said Sri Lanka therefore needs to begin looking at solar hosting capacity feeder by feeder and substation by substation, rather than treating the national grid as having unlimited capacity to absorb new distributed generation.

The problem is compounded by the evening transition, when solar generation falls rapidly just as electricity demand can increase.

“If the system has a lot of solar in the middle of the day and then loses that generation rapidly in the evening, something else has to respond. That is a flexibility problem,” he said.

This is where battery energy storage systems (BESS) are likely to become increasingly important—but the former CEB chief cautioned against allowing cheap imported battery hardware to drive the market.

“Sri Lanka could soon have huge BESS demand, very cheap battery hardware and everyone suddenly becoming a BESS pundit. What could possibly go wrong?” he said.

He cited fire safety, degradation, poor integration, weak energy-management systems, questionable warranties, incorrect sizing, inappropriate grid locations and poor thermal management as major risks.

“A system can look fantastic in Excel on Day One but perform very differently in Year Two,” he told The Island.

He said the future BESS market would therefore be determined less by who could supply the cheapest container and more by who understood the complete system.

“The future BESS business will not be about who can assemble the cheapest container. It will be about who understands battery, PCS, EMS, grid, safety, degradation and dispatch economics as one system,” he said.

For Sri Lanka, storage should also be considered as a distribution-grid asset, rather than solely as a large transmission-level installation.

Strategically located batteries could absorb excess rooftop solar on constrained feeders during the middle of the day and release electricity later when local demand rises, potentially reducing network congestion and improving the value of distributed generation.

“The question is not simply, ‘How many megawatt-hours of batteries do we need?’ The question is, ‘Where does the battery create the greatest system value?’” he said.

He said China’s and India’s experience could broadly be viewed as three stages: Phase One—build solar and wind; Phase Two—build storage; and Phase Three—redesign the grid around renewables.

Sri Lanka, he said, should learn from that progression before renewable penetration makes grid problems significantly more expensive to solve.

“Installing another large amount of solar is one thing. Absorbing those electrons when the sun is shining everywhere at once is quite another,” he said.

“Solar taught us how to generate cheap electrons. BESS and the grid will decide whether those cheap electrons are actually useful when they are needed.”

“That is perhaps the biggest lesson Sri Lanka should take from China and India’s energy transition right now,” he added.

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SC rules President Sirisena’s pardon of Gnanasara thera invalid

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The Supreme Court yesterday ruled that former President Maithripala Sirisena’s decision to grant a presidential pardon to Bodu Bala Sena (BBS) General Secretary Ven. Galagoda Atte Gnanasara Thera was arbitrary and invalid in law.

A three-judge bench headed by Justice Janak de Silva delivered the judgment in response to fundamental rights petitions filed by the Centre for Policy Alternatives (CPA) and Sandhya Ekneligoda, challenging the former President’s decision to release the monk from prison.

Gnanasara Thera had been sentenced by the Court of Appeal in August 2018 to 19 years’ rigorous imprisonment, to run concurrently as six years, after being found guilty of contempt of court over his conduct inside the Homagama Magistrate’s Court on January 25, 2016, during proceedings related to the disappearance of Prageeth Ekneligoda.

The Supreme Court subsequently upheld the Court of Appeal’s finding of guilt on October 5, 2018.

However, Gnanasara Thera was released from Welikada Prison on May 23, 2019, after the then President Sirisena granted him a presidential pardon.

The petitioners challenged the legality of the pardon, prompting the Supreme Court to examine the exercise of the President’s constitutional power of clemency.

The Court’s ruling yesterday effectively nullifies the pardon granted to the BBS leader.

Viran Corea, PC, with Luwie Ganeshathasan and Khyati Wikramanayake appeared for the CPA, while Counsel Asthika Devendra, with Pulasthi Hewamanne, instructed by Manjula Balasuriya, appeared for Sandhya Ekneligoda.Counsel Thishya Weragoda, with Sanjaya Marambe and Iresh Senevirathne, appeared for Gnanasara Thera. Faiszer Musthapha, PC, with Pulasthi Rupesinghe, appeared for former President Sirisena.

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