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COPF calls for review of VAT changes impacting medical, agricultural sectors

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COPF chaired by Dr. Harsha de Silva in session

The Committee on Public Finance (COPF), at a recent meeting, requested the Ministry of Finance to consider VAT exemptions for medical equipment, ambulances, high-protein agro foods for children, and agricultural items.

The Committee made that request in respect of the Value Added Tax (Amendment) Bill, The Finance Bill amending the Finance Act, No. 35 of 2018 and the Finance Act, No. 12 of 2012, and the Imports and Exports Control Act related to Gazette No. 2353/16.

The Committee questioned the rationale behind including VAT for agricultural items, which will impact the domestic agricultural and food industry.An official representing the Ministry of Finance stated that agricultural machinery and other equipment, including chemical fertilizer previously listed as exempted, will now be liable for VAT under the said Bill. Finance ministry officials added that dairy products such as liquid milk and eggs will also be subject to VAT.

However, agricultural seeds, agricultural plants, shrimp feed including prawn feed, and animal feed excluding poultry feed will be exempted from VAT. Wheat, wheat flour or powdered milk, pharmaceutical products, and drugs will also be exempted.

The Committee highlighted products made from grains cultivated in Sri Lanka, identified as high-protein and high-energy agro foods, are now subjected to VAT at a time when child malnourishment is considered to be on the rise.

The Committee also questioned why ambulances and medical equipment are being subjected to VAT.

After thoroughly examining the Value Added Tax (Amendment) Bill, the Committee granted approval, contingent upon the Ministry of Finance incorporating the proposed amendments by the Committee on Public Finance, provided they are in agreement.

However, the Committee urged the officials to reassess VAT exemptions for medical equipment, ambulances, fertiliser, and food products derived from grains classified as high-protein agro foods and agricultural items.

The Committee on Public Finance further revealed that the elimination of VAT exemptions will not impact the fares of UBER and PickME. Dr. Harsha de Silva, the Committee Chair, emphasised that as UBER and PickME have included VAT since their inception, contrary to other beliefs, the proposed VAT changes will only result in a 3% rise without significantly affecting the ultimate fare that customers are required to pay.

The Committee on Public Finance also considered the Finance Bill amending the Finance Act, No. 35 of 2018 and the Finance Act, No. 12 of 2012, which proposes provisions to release motor vehicles imported into Sri Lanka that were not cleared from customs due to import restrictions or non-payment of taxes.

However, given the matters arising from importing and opening LCs post the suspension of motor vehicle imports by Gazette Extraordinary No. 2176/19 dated May 22, 2020, under the Import and Export Control Act, the Committee Chair instructed the Ministry of Finance to submit a report on the provisions to release 119 imported vehicles yet to be cleared from customs. The Committee thus decided to reconsider the said from thereon.

Moreover, following the consideration of the Imports and Exports Control Act related to Gazette No. 2353/16, the Committee approved the said.

State Ministers Shehan Semasinghe, (Dr.) Suren Raghavan, Members of Parliament Patali Champika Ranawaka, Nimal Lanza, Isuru Dodangoda, Madhura Withanage, Mahindananda Aluthgamage, Wajira Abeywardena, and Harshana Rajakaruna, were present at the Committee meeting held.



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CEB engineers raise alarm over power sector stability

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A senior electrical engineers attached to the Ceylon Electricity Board (CEB) have warned that unresolved structural and policy issues within the power sector could threaten the long-term stability of the national grid, urging authorities to act swiftly to address mounting technical and administrative concerns.

Speaking on condition of anonymity, they said the electricity network was operating under increasing strain due to delayed infrastructure upgrades, financial constraints, and growing demand.

“The national grid is not something that can be managed casually. It requires systematic planning, preventive maintenance, and timely investment. If these are compromised, the risk to system stability increases,” the engineers said.

They noted that several transmission and substation modernisation projects were behind schedule, while ageing thermal plants continued to shoulder a significant portion of the country’s base load demand.

“Engineers are committed to ensuring an uninterrupted supply. But professional expertise must be respected in decision-making. Technical matters cannot be subjected to short-term political considerations,” the engineers added.

Meanwhile, the powerful Ceylon Electricity Board Engineers’ Union (CEBEU) echoed similar concerns, warning that failure to address long standing professional and structural issues could have serious consequences for the power sector.

In a statement, the CEBEU has said that engineers have repeatedly called for reforms that safeguard the integrity of the utility and ensure that operational decisions remain grounded in technical evaluation.

“The electricity sector is a critical national asset. Any attempt to weaken institutional safeguards or bypass professional consultation will directly impact service reliability and long-term sustainability,” the union said.

The CEBEU has stressed the importance of transparent engagement between policymakers and technical personnel, noting that morale among engineers could be affected if their concerns continue to go unheard.

Industry analysts point out that the power sector plays a central role in Sri Lanka’s economic recovery efforts, particularly as the country seeks to expand industrial activity and attract investment. Stability in electricity supply remains a key determinant of business confidence.

The senior engineer stressed d that the objective of raising concerns is not confrontation but preservation of the grid’s integrity.

“Our responsibility is to the public. Electricity powers hospitals, industries, and homes. Safeguarding the system is a national duty,” he said.

With tensions simmering within the sector, stakeholders say meaningful dialogue between authorities, engineers, and trade unions will be crucial in ensuring that Sri Lanka’s power infrastructure remains resilient in the face of growing challenges.

By Ifham Nizam

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CB identifies 24 pyramid scams in Sri Lanka

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The Central Bank (CBSL) yesterday announced that investigations had identified 24 companies and applications operating prohibited pyramid schemes.

In a public notice issued under Section 83C of the Banking Act, No. 30 of 1988 (as amended), the CBSL said the following entities had been “ascertained and determined as prohibited schemes”: Tiens Lanka Health Care (Pvt) Ltd, Best Life International (Pvt) Ltd, Mark–Wo International (Pvt) Ltd, V M L International (Pvt) Ltd, Global Lifestyle Lanka (Pvt) Ltd, Fast3Cycle International (Pvt) Ltd, Sport Chain App / Sport Chain ZS Society Sri Lanka, OnmaxDT, MTFE App / MTFE SL Group / MTFE Success Lanka / MTFE DSCC Group, Fastwin (Pvt) Ltd, Fruugo Online App / Fruugo Online (Pvt) Ltd, Ride to Three Freedom (Pvt) Ltd, Qnet / Questnet, Era Miracle (Pvt) Ltd and Genesis Business School, Ledger Block, Isimaga International (Pvt) Ltd, Beecoin App and Sunbird Foundation, Windex Trading, The Enrich Life (Pvt) Ltd, Smart Win Entrepreneur (Pvt) Ltd, Net Fore International (Pvt) Ltd / Netrrix, Pro Care (Pvt) Ltd and Shade of Procare (Pvt) Ltd, SGO / sgomine.com and I.C.A.N Advertising (Pvt) Ltd and its affiliates icanonlineadvertising.com, bannercuts.com, bannercuts.lk, bannercuts.net and bannercuts.org

The CBSL said pyramid schemes, also referred to as multi-level marketing or direct selling schemes in certain instances, operate as recruitment-based programmes in which members enlist others into an expanding “downline” structure resembling a chain letter.

Under such arrangements, a portion of the fees paid by new recruits is channelled upwards to earlier participants, known as the “upline”, who are fewer in number.

The Central Bank warned that such schemes are inherently unsustainable, with the vast majority of participants at the lower tiers eventually losing their investments, while only a small number of early entrants are able to recover or profit from the funds contributed by subsequent recruits. It noted that when a pyramid scheme collapses, up to 99 per cent of those in the lower levels risk losing their money.

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Church urges patience, warns against interference with Easter attacks probe

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Director of Communications for the Archdiocese of Colombo, Rev. Fr. Cyril Gamini Fernando, yesterday expressed confidence that ongoing investigations into the 2019 Easter Sunday terror attacks would yield meaningful results and urged the public and all stakeholders to exercise patience and allow the probe to proceed independently.

Addressing a media briefing in Colombo yesterday, Fr. Fernando called on all parties to refrain from interfering with the investigations, warning that any attempt to obstruct the process would amount to a grave injustice to the victims.

He said he believed there was credible evidence to warrant the arrest of military intelligence veteran Maj. Gen. (Retd.) Suresh Sallay.

Referring to the coordinated bombings on April 21, 2019, which targeted churches and hotels and claimed nearly 300 lives, Fr. Fernando described the attacks as a “barbaric” act and a “massacre” that killed worshippers attending Easter services as well as individuals from different religious and ethnic communities.

By Norman Palihawadane

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