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
Cyber heist at External Resources Dept: Funds diverted in email hack, CID probe underway
A suspected cyber fraud targeting Sri Lanka’s Department of External Resources has triggered a high-level investigation after hackers allegedly manipulated official email communications to divert funds to unauthorised overseas accounts, Deputy Finance Minister Dr. Anil Jayantha Fernando said.
The sophisticated breach is believed to have involved the interception and alteration of email exchanges between the Department and Export Finance Australia, raising serious concerns over vulnerabilities in the Government’s digital financial communication systems.
According to the Deputy Minister, the fraud came to light following suspicious changes detected in bank account details linked to a payment transaction involving India. This anomaly prompted officials to scrutinise prior correspondence, eventually uncovering what appears to be a coordinated cyber intrusion designed to reroute funds.
“This was not a routine technical glitch. There is clear indication of external interference where communication trails have been tampered with,” Jayantha said, noting that complaints had already been lodged with law enforcement authorities.
“Investigations are now being handled by the Criminal Investigation Department (CID), which is probing the extent of the breach, the financial losses incurred, and the possible involvement of international cybercrime networks”.
Financial analysts warn that the incident underscores growing risks faced by state institutions engaged in cross-border financing arrangements, particularly when relying heavily on unsecured or inadequately protected communication channels.
The Department of External Resources plays a pivotal role in managing Sri Lanka’s foreign-funded projects and liaising with international lenders and export credit agencies. Any compromise in its communication systems could have far-reaching implications for investor confidence and the country’s financial credibility.
Authorities are expected to review existing cybersecurity protocols across key financial institutions in the wake of the breach, with calls mounting for tighter safeguards, encrypted communications, and multi-layer verification systems for fund transfers.
Meanwhile, officials remained tight-lipped on the exact quantum of funds involved, citing the ongoing nature of the investigation. However, sources indicated that the attempted diversion was significant enough to raise alarm at the highest levels of the Finance Ministry.
The incident adds to a growing list of cyber-related financial threats confronting governments worldwide, highlighting the urgent need for robust digital governance frameworks as Sri Lanka continues to engage with international financial partners.
By Ifham Nizam
Business
Sun Siyam Pasikudah marks the New Year at the shore of Sri Lanka’s rising coast
There is something about Avurudu that naturally fills every corner of Sri Lanka with energy and connection, and this year, that spirit extended to the shores of Pasikudah. At Sun Siyam Pasikudah, part of the Prive Collection within The House of Siyam, the Sinhala and Tamil New Year was celebrated on 14 April with a vibrant, full day programme that brought together guests and team members in true festive spirit, warm, lively, and centred around shared traditions and generous feasts.
The day followed the rhythm that Sri Lankan families know well. At the auspicious hour determined by the almanac for the New Year, the hearth at The Kitchen was ceremonially lit and the milk pot set to boil, symbolising warmth, unity, and the drawing in of abundance for the year ahead. This followed another auspicious moment at noon where a Traditional Sweet Table was laid out, where kiribath, kokis, kavum, aasmi and more were on offer, prepared by the resort’s culinary team and enjoyed by guests who had gathered, some for whom this was the most natural thing in the world, and others encountering the tradition for the very first time.
From 3:00 PM onwards, the afternoon opened into games. The resort grounds hosted the full run of Avurudu classics: Kana Muttiya (Pot Breaking), Kaba Adeema (Tug of War), Banis Kama (Bun Eating Contest), Balum Pipirawima (Balloon Blowing), Kotta Pora (Pillow Fighting), the Sack Race, Spoon Race, Blindfold Yogurt Feeding, Eyeing the Elephant, and Finding the Coin on the Plate. Guests of all ages joined in, and the kind of laughter that filled the afternoon is really the only way to describe what Avurudu at its best feels like.
“Avurudu is one of those occasions where the feeling in the air does all the work. The auspicious timings, the lighting of the hearth, the sweet table, the games in the afternoon: each of these carries its own meaning, and when you observe them properly and together, the day takes on a quality that is hard to replicate at any other time of year. We wanted our guests, wherever they had travelled from, to feel genuinely part of that, not simply watching from the outside. I think the day showed that Pasikudah is a place where that kind of celebration feels entirely at home,” said Arshed Refai, General Manager, Sun Siyam Pasikudah
The celebration is also a reflection of a broader moment for this stretch of the Sri Lankan coast. Pasikudah has long been known among those who seek it out: a bay of extraordinary calm and clarity, unhurried in a way that the island’s busier coastal destinations rarely are. What has shifted in recent years is that more people are finding it. Sri Lanka welcomed over 600,000 international visitors in the first quarter of 2025, generating tourism revenue of USD 1.025 billion, and the East Coast is increasingly part of that conversation. Sun Siyam Pasikudah has been central to placing Pasikudah on that map.
The resort’s 34 pavilions, offered in one and two bedroom configurations across garden and beach settings, are styled in a way that is quietly striking: monochrome interiors with warm golden accents, spacious and well-considered, always with the ocean close by. Dining is spread across The Kitchen, The Cellar, The Slice and Grill, The Tea House, and The Bar, with destination dinners available for guests who want a private evening under the stars. Sailing excursions along the coastline, spa and wellness, and encounters with local arts and crafts complete what Sun Siyam Pasikudah offers throughout the year.

Business
Allianz Avurudu Negam returns, easing the journey home
During the Sinhala and Tamil New Year, a time defined by togetherness, tradition and returning home, Allianz Insurance Lanka Limited once again stood alongside Sri Lankan communities by continuing its Avurudu Negam initiative for the second consecutive year, expanding its reach to support families during the festive travel period.
Building on the positive response to last year’s programme, Allianz Avurudu Negam 2026 was shaped to make the journey home special and loved during Avurudu. In response, Allianz offered ticket refunds to eligible passengers travelling on the Galu Kumari service from Maradana, supporting passengers journeying home to celebrate the New Year with loved ones.
Passengers boarding from Maradana and Fort and travelling beyond Galle up to Belliatta were eligible for the refund, helping make the journey home more affordable at a meaningful time of year. Acknowledging that financial strain frequently continues even after the celebrations conclude, Allianz extended the refund window until 30th April, easing the cost of returning to Colombo after Avurudu.
To complement this support, Allianz added a heartfelt touch rooted in New Year tradition. Traditional oil cakes were distributed to passengers boarding from Maradana, allowing families to take a familiar symbol of Avurudu back home and share it around their festive tables.
Allianz also prioritised protection during this period. Passengers eligible for the refund were given the option to obtain free Allianz Personal Accident Insurance, reflecting the belief that protection does not end with a journey, but continues wherever people go. In addition, these passengers were included in an LKR 1 million raffle draw, as an extension of the existing campaign, offering one winner shopping vouchers redeemable at outlets of their choice and support that extends beyond the New Year season.
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