Business
Govt. urged to bring foreign digital companies operating in Sri Lanka under a local regulatory system
- International digital companies in Sri Lanka are exempt from paying taxes
- They take millions of dollars out of the country every year
- Local enterprises that offer same services subject to taxes
- Central Bank of Sri Lanka is aware of this inequality
- Levying from non-domiciled businesses no longer a choice but a necessity
- Indian policymakers have won this battle and so can we
by Sanath Nanayakkare
FITIS, the voice of Sri Lankan Information and Communication Technologies industries urges the government to bring foreign digital companies operating in Sri Lanka, under a local regulatory system where they are liable for taxes and other regulations like their local counterparts.
“Apart from the lack of fairplay for local companies, these foreign digital operators take millions of dollars out of the country every year. In a situation where Sri Lanka is strapped for dollars to buy essentials like medicine, fuel and food and banks are unable to issue dollars to students sitting for foreign exams can we any longer afford this foreign exchange outflow for locally consumed services?,” FITIS asks.
The Digital Chapter of the Federation of Information Technology Industry Sri Lanka (FITIS) states that the recent imposition of taxes by the government is understandable in the current circumstances, at this critical point of nation building. However, there are other factors that need to be looked at and changed if we are to progress with the digital economy connected to digital platforms, they say.Channa de Silva, President of the FITIS Digital Chapter says, “Digitalisation is a way forward that can rationalise all our economic activities as well as being a leveller that democratises opportunity. However, if we don’t treat every player in the field the same way, it can create inequality, monopolies and result in heavy losses to the economy.”
The following are some comments made by Channa de Silva.
“A viable and healthy ecosystem for startups and entrepreneurs to exist requires rules and regulations that ensure fairplay, especially when they compete with global giants who enter local markets. Therefore, a level playing field for everyone is an urgent need in this particular sector, and one way to ensure that is to bring foreign digital companies operating in our markets under a local regulatory system where they are liable for taxes and other regulations. For example, well known foreign digital operators handling ride-sharing and transport of goods in Sri Lanka, use our road networks, fuel subsidies and state infrastructure to further their businesses, yet they have an unfair advantage over their tax paying local counterparts.”
“Foreign players have enjoyed this tax free haven for many years, which is a good case study of a lack of fairplay for equivalent local operators in the industry. These operators, by refusing to register as local entities, do not follow any of the laws of Sri Lanka and avoid paying local taxes. They are operating under the misapprehension of not being liable to pay taxes in areas they operate, outside their country of origin. However, this is a stand that has been challenged by countries like India who have won the battle to be treated on an equal footing.”
“The fact that India has been fighting the issue of taxing foreign digital services for a long time is well documented in the media. They were the first to introduce a digital tax called the ‘Equalisation Levy,’ back in 2016, which was payable by Indian residents for online advertisement services purchased from non-resident companies. Later, the Equalisation Levy was extended to include a 2% levy on all online sale of goods or services into India by non-resident e-commerce operators.”
“The Reserve Bank of India (RBI) had ordered foreign payment companies to locally store data on all transactions taking place within India from October 15, 2018. Thus, global payment companies need to pay around 15% tax on their income from India, as they set up servers locally to comply with the RBI directive on data storage. The central government of India went further, by bringing a 2% digital service tax levy on all trade and services of foreign e-commerce companies through their Finance Bill of 2020-21. With that even companies like Amazon, Walmart-owned Flipkart and others having an annual turnover of ₹2 crore or more operating in India became liable for tax. The expanded equalisation levy became applicable from April 2021 to a range of digital services, including non-resident e-commerce operators involved in the online sale of goods and provision of services.”
“The G20 summit and the Organisation for Economic Co-operation and Development meeting held in October 2021, made a new foray into global taxation rules. Accordingly, a decision was made to ensure that foreign multinational firms will pay a minimum 15% of their total revenue in countries they operate in, which means companies like Microsoft, Google, Amazon, etc, would pay a tax of 15% for their operations in India.”
“Subsequent to this, India and the US agreed that the Equalisation Levy currently in existence for US based companies, will count as a credit against future taxes. The credits will be accounted for from April 1, 2022, until either March 31, 2024, or whenever the global taxes law comes into force. In the meantime, India continues to levy the 2% equalisation tax as credits.”
FITIS is of the view that it is more than time for Sri Lanka to take a leaf from India’s regulatory policy book. Channa de Silva says, “It is vital for a country like ours, which is almost exclusively reliant on foreign investment in order to progress, to recognize the importance and impact of the economic bolster provided by local companies. A right step in this direction would be to concede that as of now, there is no level playing field between International digital companies and local companies, businesses and startups. International digital players in Sri Lanka are exempt from paying taxes, whereas local enterprises that offer the same services are subject to taxes — more than before in the current economic crisis.”
“The Central Bank of Sri Lanka, was aware of the inequality because they highlighted it in their 2019 report that says ‘gig platforms, which are operating worldwide despite being based in a particular country, are difficult to be controlled by the host country’s regulatory environment and taxation system in the absence of local business registration. In contrast, local platforms are under regulatory scrutiny and are liable for local taxes. Such differences in the applicability of regulation will not ensure a level playing field for local operators.”
“Taking steps to bring in regulations to tax non-domiciled businesses is no longer a choice but a necessity. Apart from guaranteeing a level playing field and equal opportunity for local digital players, this will save us much needed dollars that are necessary to sustain the people of this country,” Channa de Silva says.
Business
Priority areas for deepening Japan-SL economic ties
Japan Business Council (SLJBC) of The Ceylon Chamber of Commerce recently held its 47th AGM, with the Ambassador of Japan and the Patron of the Council, Akio ISOMATA, attending as the Chief Guest.
Addressing the gathering, Ambassador ISOMATA outlined three priorities for deepening bilateral economic relations: an effective and forward-looking trade and investment policy, the promotion of domestic industrial policy, and expanded investment in renewable energy. He noted that Sri Lanka’s ongoing review of its Free Trade Agreement policy would be important in shaping the country’s future negotiating landscape. He encouraged Sri Lanka to look Eastward toward Southeast Asia and Japan, proposing that the country adopt an export-oriented industrial model. The Ambassador welcomed the Government’s National Export Development Plan 2026 and National Mineral Policy 2026 as consistent with Japan’s vision of connecting Sri Lanka’s export-related manufacturing sectors with India’s high-growth manufacturing base.
In his address, President Athulla R F Edirisinghe reflected on nearly seven decades of humanitarian and development support extended by Japan to Sri Lanka, and paid tribute to the Chairman of the Sasakawa Peace Foundation Yohei Sasakawa, for his magnanimity in establishing the Foundation. Reflecting on the history of Japanese investment in the region from the 1970s onward, he observed that Sri Lanka had missed many opportunities to attract Japanese foreign direct investment. Highlighting the 2025 proposal for a Sri Lanka – Japan Economic Corridor by the Ministry of Economy, Trade, and Industry Japan, he called on Sri Lankan businesses, industry associations, and the wider community to come together in dialogue with the Government to ensure the country does not miss this opportunity as well.
2026/27 Committee: President: Athulla R F Edirisinghe – Director, Hirohama Ceylon (Pvt) Ltd, Senior Vice President – Ruwan Waidyaratne – Managing Director, Hayleys Advantis Ltd, Vice – President – Shamil Mendis – Managing Director, Spear International (Pvt) Ltd, Treasurer – Rohitha Mendis – Managing Director of Prudential Shipping Lines (Pte) Ltd, Immediate Past President – Mahen Kariyawasan – Managing Director, Andrew The Travel Company (Pvt) Ltd, representatives from Amano Lanka Engineering (Pvt) Ltd, BOV Capital (Pvt) Ltd, Brandix Apparel (Pvt) Ltd, Heritage Teas (Pvt) Ltd, Kalhari Enterprises (Pvt) Ltd, Lanka Harness (Pvt) Ltd, Dentsu Grant (Pvt) Ltd, MAC Holdings (Pvt) Ltd, and Vidullanka PLC. By invitation: HVA Foods PLC (subsidiary of George Steuart & Co), Spillburg Holdings (Pvt) Ltd, and Vaughan Chemicals (Pvt) Ltd.
The Sri Lanka – Japan Business Council plays an important role in promoting trade, tourism, and investments between Japan and Sri Lanka. For membership inquiries contact Kiyara at The Ceylon Chamber of Commerce via E-mail: businesscouncils1@chamber.lk or Tel.: 011 5588875/ 5588800.
Business
Rekawa turns turtle conservation into a 30-year community business model
By Ifham Nizam
What started 30 years ago as an effort to protect sea turtles has evolved into a community-based economic model that has generated livelihoods, attracted tourists and transformed Rekawa into one of Sri Lanka’s best-known nature tourism destinations.
The Rekawa Turtle Conservation Project, launched on September 2, 1996, by the Turtle Conservation Project (TCP) in partnership with the Department of Wildlife Conservation and the Rekawa community, marked its 30th anniversary last week, demonstrating how biodiversity protection can become an economic opportunity for communities living alongside sensitive natural resources.
Speaking at the anniversary celebrations, TCP chairman Thushan Kapurusinghe said the project currently provides direct livelihoods for 28 people, but its economic impact extends considerably beyond those directly employed by the programme.
‘Today, 28 people directly earn their livelihood through this project. But its impact goes far beyond those 28 individuals, Kapurusinghe said.
He pointed to the transformation of the area over the past three decades, arguing that the growth of tourism in the community has been closely linked to the turtle conservation programme.
‘If you travel from Netolpitiya to this area, you can clearly see how much the village has transformed over the years. There is no doubt that the growth of tourism in this community has been driven by the Turtle Conservation Project, he said.
The economic significance of Rekawa lies in its ability to convert the protection of a natural asset into a source of recurring community income.
Tourists do not come to Rekawa merely to see a beach. They come to witness sea turtles emerging from the ocean and nesting in their natural habitat—a tourism experience that depends directly on the continued protection of the nesting beach.
Kapurusinghe said tour operators regularly bring visitors to Rekawa, with some tourists traveling there after visiting major attractions such as the Kandy Esala Perahera.
The model represents a fundamental shift from viewing conservation as an expense to recognising biodiversity as an economic asset that can generate sustainable livelihoods when properly managed.
The 30th anniversary celebration at the Rekawa Turtle Conservation Project Information Centre brought together Southern Wildlife Region Director of the Department of Wildlife Conservation Channa Suraweera, government officials, conservation organisations, community representatives and long-standing supporters of the initiative.
Individuals who had contributed to the project over the past three decades were also recognised with awards for their service to sea turtle and environmental conservation.
Rekawa’s experience has attracted international attention because of precisely this combination of conservation and community development. The project has received international recognition as well as the Green Employment Award from the Ministry of Environment and Natural Resources. Earlier international recognition included a highly commended ‘Tourism for Tomorrow’ award, while the project’s turtle-watch programme subsequently received further recognition in responsible tourism and conservation.
Business
Ceylinco Life brings premium policyholders closer to the magic of the Kandy Perahera
For an evening, the timeless spectacle of the Kandy Esala Perahera unfolded at especially close quarters for a select group of Ceylinco Life’s most valued policyholders and their families, who were hosted to an exclusive viewing experience by the Company’s Customer Relations Division.
Held at the Ceylinco Life Kandy Branch on Kings Street, the annual event coincided with the second Randoli Perahera, bringing guests into the heart of one of Sri Lanka’s most spectacular expressions of culture, tradition and pageantry.
As the procession made its majestic passage through the streets of Kandy, guests enjoyed VIP seating at a prime vantage point, allowing them to experience the colour, movement and grandeur of the Perahera up close. The evening offered a fitting setting for Ceylinco Life to celebrate its enduring relationships with its premium clientele.
The experience extended well beyond the spectacle outside. Guests were welcomed with evening refreshments and an exclusive dinner buffet presented by the prestigious Amaya Hills Resort, adding a fine-dining dimension to an already memorable evening.
Families, too, were at the centre of the occasion. A private movie theatre experience provided entertainment for children and adults alike, while each attending family received a beautifully framed family photograph as a personalised souvenir, a tangible reminder of an evening shared together against the backdrop of one of Sri Lanka’s most treasured cultural traditions.
Besides being a much sought-after opportunity to watch the Perahera, the occasion was an expression of appreciation. Through its continuing Customer Relationship Management activities, Ceylinco Life seeks to create experiences that recognise its most valued policyholders not simply as customers, but as relationships to be celebrated and nurtured. And on this particular August evening, the enduring splendour of the Kandy Perahera provided the perfect setting for doing just that.
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