Business
Implementation seen as key to Budget 2025’s success
By Ifham Nizam
Despite the 2025 budget’s optimistic outlook, implementation remains the key to its success, warned Nandika Buddhipala, Chief Financial Officer of Commercial Bank PLC.
Speaking at a post budget seminar on Wednesday organized by the National Chamber of Commerce of Sri Lanka, Buddhipala stressed that while tax reforms and fiscal discipline are necessary, businesses will need clarity on regulatory frameworks—especially concerning VAT changes, investment incentives and trade policies.
In response to a question posed by The Island Financial Review, he added: “Budget 2025 sets the foundation for growth, but execution will be the true test. If we can manage debt effectively, encourage exports and attract investors, we can create a resilient economy.”
Buddhipala added: “We appreciate the government’s efforts in aligning the budget with the Public Finance Management Act and the IMF Debt Sustainability Framework. However, it is critical that we remain aware of the persistent debt servicing and interest cost burden.
“Sri Lanka’s high borrowing costs mean that interest payments remain a significant portion of government expenditure. Policymakers should adopt concrete plans for reducing this burden while ensuring economic stability.
“We must create an environment that fosters exports and attracts FDI. The emphasis should be on trade-oriented sectors rather than industries that do not contribute to foreign exchange earnings.
“The government’s aims to strengthen ties with ASEAN nations through participation in the Regional Comprehensive Economic Partnership (RCEP), is a move that could boost trade and investment opportunities.
“We need to expand Double Taxation Agreements (DTAs) beyond the current 46 countries. This would increase investor confidence and facilitate smoother trade flows.
“The proposed Development Bank, which seeks to provide financial support for SMEs and new entrepreneurs, is a positive step but access to finance must be streamlined.
“Providing tailored financial solutions for SMEs is essential. However, ensuring that the Development Bank is efficiently integrated into the existing banking system will determine its success.
“This budget is a strategic response to economic challenges. We need to strike a balance between private sector-driven growth and state intervention to ensure stability and equitable distribution of wealth.”
Meanwhile an official explained in response to another query raised by this newspaper: “The first reading of the budget, which will be followed by a month-long discussion in a budget-related forum, aims to clarify ambiguities and refine implementation strategies. There are a lot of concerns regarding implementation, but this one-month period allows us to fine-tune certain aspects.”
A senior Finance Ministry representative added the following: “We have to consider international expectations and commitments, especially in the context of the International Monetary Fund (IMF) agreements. The recent IMF release of USD 330 million following policy adjustments shows the importance of staying within global economic expectations.
Hasitha Radella of KPMG Sri Lanka, presenting an overview of tax reforms said that as Sri Lanka continues its recovery, the budget is focused on several taxation reforms. Sustained improvements in fiscal management will be key to maintaining growth momentum for the country.
“Clarifications on the Simplified Value Added Tax (SVAT) system and the transition from SVAT to a Risk-Based Refund System that will streamline the VAT refund process to an efficient process are urgent requirements, said Ms. Iyesha Asanthi, Commissioner, Tax Policy & legislation of the Inland Revenue Department.
She said that if any eligible exporter who exports more than 50 percent of total supplies requires VAT refunds under the new risk-based refund system, such a need could be included in a relevant pilot project.
She added that the current VAT threshold is Rs. 15 million per quarter and Rs. 60 million per year at the standard rate 18%. Due to the current situation in the country, the budget proposals of 2025 do not include tax exemptions or concessions. However, the budget proposals made to amend individuals’ tax rates by increasing tax relief from Rs 1.2 million to 1.8 million and the relaxing of tax brackets could benefit individuals, including employees.
Ms. Jayani Wickrama Arachchi, Director, Fiscal Policy Department of Ministry of Finance, Planning and Economic Development said that with the fiscal space being highly constrained, every policy move must be strategic, ensuring key fiscal targets are protected while safeguarding economic stability in the medium term. Interest payments remain a significant burden, accounting for substantial government recurrent expenditure, primarily due to Sri Lanka’s high borrowing costs.
She added: “We need to move ahead despite these challenges.”
Business
Climate compliance pressure mounts on Lankan businesses
Lankan businesses are facing increasing pressure to strengthen climate governance, compliance, and risk management frameworks as climate-related disclosure requirements, investor expectations, and regulatory standards continue to evolve.
Against this backdrop, Genesis – the Dilmah Centre for a Sustainable Future will host a specialised post-summit technical workshop titled “Climate Action: A Strategic Executive Workshop on Climate Resilience and Business Continuity” on June 12, in Colombo.
The programme is designed as a continuation of discussions initiated at the Sri Lanka Climate Summit 2026 and will bring together sustainability managers, compliance officers, ESG professionals, risk specialists, and corporate decision-makers. It aims to translate climate commitments into practical business strategies.
The workshop will focus on implementation rather than advocacy, examining emerging disclosure frameworks, financing mechanisms, and regulatory pathways shaping corporate climate action in Sri Lanka.
Keynote speaker Dr. Lalanath de Silva, an internationally recognised environmental lawyer and governance expert, will address the evolving legal and compliance landscape influencing climate-related business decisions.
Technical sessions will cover IFRS S2 climate-related disclosures, climate risk governance, green finance opportunities, internal carbon pricing, and access to climate financing. Speakers will include climate risk specialist Rohan Cooray, Shiranee Yasaratne of Biodiversity Sri Lanka, and Suganthi Samarasinghe of UNDP Sri Lanka.
Organisers said climate readiness is increasingly becoming a business necessity rather than a sustainability option, with growing scrutiny from global markets and regulators.
Participation is free of charge, but prior registration is required due to limited seating for professionals in sustainability, governance, compliance, and risk management roles.
Business
SPAR Sri Lanka Opens New Outlet in Kurunegala
SPAR Sri Lanka has expanded its retail network with the opening of a new outlet in Kurunegala, marking another milestone in the supermarket chain’s growth across the country.
The new store, strategically located to serve the growing population of the North Western Province, offers a wide range of products, including fresh fruits and vegetables, premium meat products, bakery items, household essentials and both local and international brands.
The outlet also features several specialty sections, including a Coconut Corner, Wellness Corner and a dedicated area catering to pet care products.
Speaking at the opening, SPAR Sri Lanka Chief Executive Officer Kumar de Silva said the new outlet reflects the company’s commitment to delivering a “glocal” shopping experience by combining international retail standards with local customer preferences.
“Our Kurunegala outlet reflects our dedication to providing customers with the best range, superior quality and exceptional service under one roof,” he said.
The store also offers SPAR’s signature fresh food concepts, including in-store bakery products, ready-to-eat meals and freshly prepared juices aimed at meeting the needs of busy consumers.
The company said customers will benefit from a range of promotional offers, loyalty rewards, weekend deals and seasonal discounts.
SPAR Sri Lanka said the expansion would also contribute to local economic development through employment generation and support for local suppliers, further strengthening the country’s retail sector.
Pic and Text by SK Samaranayake
Business
Royal end title drought with dramatic shootout triumph
Royal College, Colombo, emerged unbeaten champions of the All-Island Under-20 Hockey Tournament after defeating defending champions St. Thomas’ College, Matale, in a nail-biting sudden-death penalty shootout at the Rajarata University Grounds in Mihintale last week.
The final ended in a 1-1 draw after Royal equalised five minutes from time to cancel out the Matale side’s earlier lead.
With the penalty shootout also ending in a 4-4 deadlock, the match proceeded to sudden death. The Reid Avenue outfit eventually prevailed in the second round of sudden-death penalties to clinch the title.
A brilliant save by goalkeeper Stefan Anthonipillai, who stretched to his right to deny a crucial attempt, and the decisive conversion by Rumal Jayasinghe helped Royal secure the Under-20 championship for the first time since the tournament’s inception in 2014.
Royal’s centre-forward Savain Karunasiri was one of the team’s standout performers throughout the tournament, scoring crucial goals, including strikes in both the semi-final and the final. Anthonipillai was equally impressive, guarding the goal superbly throughout the seven-match campaign.
Royal finished runners-up when the tournament was held in Matale last year.
The Colombo school produced a series of consistent performances despite having to play on an uneven grass surface that was not ideally suited to the fast-paced modern game.
Royal began their campaign with a 2-0 victory over Christ Church College, Matale, before defeating arch-rivals St. Thomas’ College, Mount Lavinia, 1-0. They then beat Kingswood College, Kandy, 2-0 and Maris Stella College, Negombo, 2-1 to top their group.
In the quarter-final, coach Damith Panditharatne’s side overcame fancied Dharmadutha College, Badulla, by 2-0.
Royal then edged out St. Joseph Vaz College, Wennappuwa, 1-0 in the semi-final, adopting a disciplined defensive approach against the aggressively attacking Puttalam outfit.
In the other semi-final, St. Thomas’ College, Matale defeated Trinity College, Kandy, 3-1. St. Joseph Vaz later beat Trinity 1-0 in the third-place playoff.
Panditharatne’s five-year development programme, with a strong emphasis on fitness, stamina and technical skills, played a key role in Royal’s success. The title marked Royal’s first national Under-20 tournament triumph since winning the National Schools Games in 2017.
A former national player, Air Force striker and Sri Lanka Police coach, Panditharatne has focused on addressing the weaknesses of individual players while building a cohesive unit. The former Christ Church College, Matale player has been coaching Royal since 2022 with the support of the Royal College Hockey Club (RCHC), comprising former Royal hockey players.
For his outstanding performances, Anthonipillai was adjudged the Best Goalkeeper of the Tournament. Royal College was also named the Most Disciplined Team of the Tournament.
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