Business

Cure could be worse than the disease says company director

Published

3 years ago

2022/11/8

Sahan Weerasooriya

Chaminda Wanigaratne

New Tax Structure

By Sanath Nanayakkare

A new tax policy is a timely need for Sri Lanka, but the government should be careful not to throw the baby out with the bath water, because then, the cure would be worse than the disease, Chaminda Wanigaratne – Director Automotive at Ideal Motors (Pvt) Ltd. told The Island Financial Review.

‘Raising high levels of revenue from an anti-industrial tax policy may be the easiest way to pay the salaries of government servants, state-sector pensions, meet huge loan and interest payment liabilities payable by the government, and also to keep the loss making state-owned-enterprises (SOEs) flying their flag above the water. But the government should evaluate the repercussions of this move before it backfires,” he said.

“The government of Gotabaya Rajapaksa gave effect to substantial tax cuts without a mandate from the people, and we all know the repercussions it brought to the country at large. Now the current administration’s policy decisions led by President Ranil Wickremasinghe are going to give effect to historically-high corporate and personal income taxes of which the repercussions are going to be grave on the industrial sector and thereby on the overall economy ,” he says.

He further said::

“If the new tax bill is passed in parliament, it will definitely discourage export-oriented companies and companies that are engaged in the production of import substitutions. In addition to that, it will no doubt discourage the country’s top talent in the fields of manufacturing, technological, finance, marketing, sales, innovation etc. This scenario will create a pervading effect of dismay and disappointment among local manufacturers, business owners, shareholders, C-suite personnel and middle level executives who are collectively the driving force behind the private sector, which is undoubtedly the engine of growth.”

“We are not saying that taxes shouldn’t be levied. In this country, we need to have a minimum of 15% tax to GDP ratio because Sri Lanka doesn’t have alternative earnings. But it should be levied in a strategic and meaningful way. It should be fair by the people and the society. Further, taxes collected should be well spent to improve education, healthcare, infrastructure, power and energy sector etc. But we don’t hear anything from the government whether it is going to use the tax funds for such purposes.”

“It’s clear that the government’s bull’s eye target is raising revenue to meet public expenditure at any cost. They want to have a surplus in the primary account as in 2018-2019 and show the IMF impressive numbers in the balance of payments and budget deficit. In my view, this is just not feasible in the medium to long term in an environment of high inflation, high interest rates and ultra-low growth. Levying corporate taxes of 30%-36% and personal income taxes from 6%-30% would be like robbing Peter to pay Paul. What the government should do is not transferring money from the well-managed corporate sector to the ailing public sector possibly allowing both sectors to collapse. Instead they should make public institutions more efficient and productive by making reforms such as retrenchment and reallocating existing human resources appropriately, and cutting back expenses. Placing the whole burden of loss-making SOEs such as CPC, CEB, SriLankan Airlines, CGR, CTB etc., on the private sector is a shortsighted strategy. Even if the corporates and salaried personnel pay high taxes, it won’t make our lot better. One-third of the potential tax collections will be consumed by public sector salaries, another one-third will be used to pay interest on the loans the government has taken. And the balance one-third will be channeled to fund the reeling SOEs. Not a single tax rupee is likely to be allocated for the wellbeing of the people. So, we will end up paying high taxes like in Scandinavian countries or Europe and live like poor people in North Korea. Instead of becoming another North Korea, we should take a lesson from what India did in 1990s when it encountered a similar crisis. India made the right policies at the right time boldly, and turned it into an industrial country. They established all kinds of technology manufacturing in India and the country today is a leading manufacturing hub for automobiles and automotive components in the world.”

“But unfortunately, here in Sri Lanka we don’t see such policies being conceptualized by the Government or the Central Bank or the Treasury.”

Talking about repercussions of the new tax policy he said, “With high tax rates, dollar-earning ICT sector companies that operate online, may obtain overseas business licenses, and instead of operating from Sri Lanka, they will base their stations in Dubai or Singapore. Changing online operational platforms is a matter of hours for these companies. Then their real business jurisdiction will be one of those countries and will pay taxes to those countries depriving Sri Lanka of any taxes at all. Further, export-oriented manufacturers will find the trading sector more lucrative and they too will convert into trading because the prevailing operational conditions are biased towards trading companies such as supermarket chains and fast-food chains and not import substitution companies. The high personal income taxes will affect our private sector talent pool from middle managers to cluster heads to directors. They have a lifestyle which they have not deliberately embraced but one that circumstances have compelled them to accept. Because of the nature of their jobs, they have enrolled their children in private schools, bought houses in close proximity to Colombo, maintain a car as they need their own transportation. All these mean many financial commitments at the end of each month; therefore, they can hardly take this unexpected tax hit. These skilled young people will have no other option but migrate to other countries where personal income taxes are fair and living conditions are much higher. Thus no-one with professional career prospects would want to stay in Sri Lanka. A confluence of all these will lead to even weaker external sector performance by Sri Lanka in the months ahead making the current situation bleaker.”

“So we should all unite and raise our voices to prevent this tax bill from getting passed in parliament, or otherwise, a second Aragalaya will soon ensue from the widespread frustrations triggered by this unfair tax structure,” he said.

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Related Topics:Chaminda Wanigaratne Director Automotive at Ideal Motors (Pvt) Ltd

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Business

“We Are Building a Stable, Transparent and Resilient Sri Lanka Ready for Sustainable Investment Partnerships” – PM

Published

5 hours ago

2026/02/15

Priyan

Prime Minister Dr. Harini Amarasuriya addressed members of the Chief Executives Organization (CEO) during a session held on Thursday [3 February 2026] at the Shangri-La Hotel, Colombo, as part of CEO’s Pearl of the Indian Ocean: Sri Lanka programme.

The Chief Executives Organization is a global network of business leaders representing diverse industries across more than 60 countries. The visiting delegation comprised leading entrepreneurs and executives exploring Sri Lanka’s economic prospects, investment climate, and development trajectory.

Addressing the gathering, the Prime Minister emphasized that Sri Lanka’s reform agenda is anchored in structural transformation, transparency, and inclusive growth.

“We are committed not only to ensuring equitable access to education, but equitable access to quality education. Our reforms are designed to create flexible pathways for young people beyond general education and to build a skilled and adaptable workforce for the future.”

She highlighted that the Government is undertaking a fundamental pedagogical shift towards a more student-focused, less examination-driven system as part of a broader national transformation.

Reflecting on Sri Lanka’s recent political transition, the Prime Minister stated:

“The people gave us a mandate to restore accountability, strengthen democratic governance, and ensure that opportunity is not determined by patronage or privilege, but by fairness and merit. Sri Lanka is stabilizing. We have recorded positive growth, restored confidence in key sectors, and are committed to sustaining this momentum. But our objective is not short-term recovery it is long-term resilience.”

Addressing governance reforms aimed at improving the investment climate, she said:

“We are aligning our legislative and regulatory frameworks with international standards to provide predictability, investor protection, and institutional transparency. Sustainable investment requires trust, and trust requires reform.”

Turning to the recent impact of Cyclone Ditwa, which affected all 25 districts of the country, the Prime Minister underscored the urgency of climate resilience.

“Climate change is not a distant threat. It is a lived reality for our people. We are rebuilding not simply to recover, but to build resilience, strengthen disaster mitigation systems, and protect vulnerable communities.”

Inviting CEO members to consider Sri Lanka as a strategic partner in the Indo-Pacific region, she highlighted opportunities in value-added mineral exports, logistics and shipping, agro-processing, renewable energy, pharmaceuticals, and innovation-driven sectors.

“We are not looking for speculative gains. We are seeking long-term partners who share our commitment to transparency, sustainability, and inclusive development.”

She further emphasized collaboration in education, research, vocational training, and innovation as essential pillars for sustained economic growth.

Concluding her address, the Prime Minister expressed appreciation to the Chief Executives Organization for selecting Sri Lanka as part of its 2026 programme and reaffirmed the Government’s readiness to engage constructively with responsible global investors.

The event was attended by the Governor of the Western Province, Hanif Yusoof, and other distinguished guests.

[Prime Minister’s Media Division]

Business

High Commissioner in Pakistan urges high level business visit to Colombo

Published

5 hours ago

2026/02/15

Thilina Walpola

High Commissioner Senevirathne and Dr. Munir at meeting

The High Commissioner of Sri Lanka to Pakistan, Rear Admiral Fred Senevirathne, met Dr. Zeelaf Munir, Chairperson of the Pakistan Business Council (PBC), in Karachi on Feb. 6 and urged a high level visit of Pakistani business people to Sri Lanka, a news release from the High Commission said.

Dr. Munir, who also serves as the Managing Director and Chief Executive Officer of English Biscuit Manufacturers (EBM), leads Pakistan’s premier business policy advocacy body, which plays a key role in promoting a conducive business environment, export growth, and industrial development.

The High Commissioner who was warmly received by Dr. Munir at her office briefed her on the current economic and political landscape in Sri Lanka, highlighting the country’s improving economic outlook, enhanced political stability, and a favourable environment for foreign investment, the release said.

He also outlined the policy priorities of the new Government, with particular emphasis on ongoing economic reforms, investment-friendly initiatives, and opportunities to further strengthen bilateral economic and trade cooperation between Sri Lanka and Pakistan, it said.

He invited Dr. Munir to consider leading a delegation of prominent business leaders and investors to Sri Lanka, with a view to engaging with Sri Lankan counterparts and exploring potential investment opportunities and avenues for collaboration across key sectors.

The meeting was facilitated by. Honorary Consul of Sri Lanka in Hyderabad, Mehmood Mandviwalla, who was also present. Minister and Head of Chancery of the Sri Lanka High Commission in Islamabad, Christy Ruban, and Consul General of Sri Lanka in Karachi, Sanjeewa Pattiwila also participated at the meeting.

Business

IRONMAN 70.3 Colombo Returns, Kicks Off #ActiveColombo City Transformation

Published

5 hours ago

2026/02/15

Thilina Walpola

All partners at the Ironman 70.3 Colombo Launch with Vraîe Cally Balthazaar, Mayor of Colombo at the event held last Wednesaday at Shangri-La.

Officials from the Western Provincial Council, Colombo Municipal Council, and event organisers marked the official launch of IRONMAN 70.3 Colombo – Presented by Port City Colombo today at Shangri-La Colombo, the Host Hotel, signalling the return of Sri Lanka’s premier endurance event and the start of the long-term #ActiveColombo initiative.

Scheduled from 19–22 February 2026, the world-class triathlon will anchor #ActiveColombo Week, combining international competition with a city-wide celebration of sport, health, and urban vitality. Highlights include the KAYA Colombo – Active Lifestyle & International Expo (19–21 Feb), the family-focused IRONKIDS Colombo (21 Feb), and the IRONMAN 70.3 Colombo triathlon (22 Feb), featuring swim, bike, and run events at Port City Colombo, the Official Venue Partner.

The event is set to welcome nearly 1,000 athletes from over 49 countries, many visiting Sri Lanka for the first time, bringing international media attention and significant economic impact across hospitality, aviation, retail, and transport. As part of the globally recognised IRONMAN® circuit, Colombo now joins iconic host cities such as Sydney, Nice, and Muscat, reinforcing its position as South Asia’s emerging endurance sports hub.

“IRONMAN 70.3 Colombo embodies the spirit of resilience and excellence,” said Rajan Thananayagam, Director of Serendib Multisport (Pvt) Ltd. “This event puts Sri Lanka on the world stage and showcases Colombo as a vibrant, welcoming destination for athletes and their families.”

The launch also introduced #ActiveColombo, a long-term initiative aimed at transforming Colombo into South Asia’s leading Active City. The programme focuses on activating everyday urban spaces through parks, waterfronts, beaches, clean streets, shaded corridors, and safe environments that encourage walking, cycling, yoga, and other outdoor activities.

“Through #ActiveColombo, we aim to inspire a more active generation while strengthening Colombo’s appeal as a globally competitive capital,” said Hanif Yusoof, Governor of the Western Province. Mayor Vraîe Cally Balthazaar added that the initiative symbolises inclusive growth, promoting healthier streets, greener corridors, and vibrant public spaces for residents and visitors alike.

With signature policies such as the “Every Active Street is a Shaded Street” Shade the Road initiative, Colombo aims to combine urban health, economic growth, and international sports tourism. Experts say cities that invest in active lifestyles see 10–20% reductions in long-term healthcare costs, safer streets, and higher visitor spending.

By linking IRONMAN 70.3 Colombo with #ActiveColombo, organisers hope to position the city as a healthier home for citizens, a premier destination for high-value tourists, and a credible host for global sporting and lifestyle events, cementing Colombo’s reputation as South Asia’s Active Capital.