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Lead to underfunding education, other key public services: HRW

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11 months ago

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Sri Lanka: Ruinous tax policies stoke inequality

Sri Lanka’s tax policies played a driving role in the country’s devastating 2022 economic crisis and have contributed to the chronic underfunding of education and other public services, Human Rights Watch has said in a report released on Oct. 15. The government of President Anura Kumara Dissanayake should urgently adopt measures to uphold its human rights obligations and enact reforms to a system that presently favors companies and wealthy people while failing to deliver adequate revenues.

The 101-page report, “Tax Giveaways, Struggling Schools: How Low Taxes Drove Sri Lanka’s Economic Crisis and Squandered its Education Lead,” describes how Sri Lanka’s successive governments have adopted policies that resulted in inadequate revenues, contributing not only to Sri Lanka defaulting on its debt but also to a decades-long decline in public education spending as a share of Gross Domestic Product (GDP) to among the lowest in the world. It also documents the impacts of inadequate funding on children’s right to education. Moreover, low corporate and personal tax revenues have led to an average of 80 percent of taxes coming from goods and services, which generally are regressive because they claim a higher share of poorer people’s income.

“For decades, Sri Lanka has been hostage to economic policies that starve its government of revenue and reflect a myopic focus on GDP growth,” said Sarah Saadoun, senior economic justice researcher at Human Rights Watch. “In practice, that means education spending has fallen well behind the pace of growth, turning the country from a global leader in public education to a laggard.”

Human Rights Watch interviewed over 70 people, including those affected by the economic situation and familiar with the public education system, as well as a wide spectrum of prominent Sri Lankan economic experts. Human Rights Watch also conducted a comprehensive analysis of relevant data and research relevant to Sri Lanka’s tax policies and education spending.

These policy failures have infringed upon children’s right to education, Human Rights Watch found. Sri Lanka’s education spending dropped from between 3 to 5 percent of GDP in the two decades following independence, a time when the country was an education champion among postcolonial countries, to 1.5 percent of GDP in 2022, among the lowest in the world.

Low tax revenues also contributed to Sri Lanka defaulting on its debt in April 2022, which precipitated an economic crisis including widespread job and income loss alongside a sharp rise in the cost of living that remains devastating for human rights.

While former President Gotabaya Rajapaksa introduced sweeping tax cuts in 2019 that dealt a devastating blow to revenues, Human Rights Watch found that the problem began in the late 1970s, when Sri Lanka began an economic shift common at that time that deprioritized social spending and liberalised trade. The resulting sharp decline in tax revenue from trade and other sources was not replaced by a progressive tax system that appropriately benefited from the ensuing growth.

In particular, the government began regularly granting companies broad tax exemptions through an opaque body highly vulnerable to abuse. In 2022, the cost of tax exemptions reached a staggering amount equivalent to 56 percent of revenues, or nearly three times the education budget. The government also collects only a small amount of taxes from personal income and assets and has not ensured that tax agencies have the capacity and accountability needed for tax enforcement.

The report’s focus on education illustrates a broader deprioritization of social spending, but the squandered potential is particularly salient in education, an area in which Sri Lanka was once widely regarded as a global leader. Sri Lanka was among the first countries to establish free primary and secondary education for most people.

Human Rights Watch found that low spending has led to schools charging fees to cover the cost of basic resources, posing significant hardship to many families. Inadequate public funds have also led to a vast disparity in resources based on students’ socioeconomic status. Low corporate and personal income tax revenues have led the government to heavily rely on taxes and goods and services—called “indirect taxes”—such as value-added tax (VAT) that weigh more heavily on poorer people.

In March 2023, the International Monetary Fund (IMF) approved a $3 billion bailout to Sri Lanka and creditors restructured the country’s debt, although its debt servicing obligations remain very high. In 2024, the government paid 57 percent of its revenue to creditors. In January 2025, President Dissanayake’s National People’s Power (NPP) party took office following a campaign that promised sweeping economic reforms, including reducing regressive taxes and improving education.

The government should consider eliminating corporate tax exemptions given their high cost, questionable effectiveness, and vulnerability to abuse, Human Rights Watch said. The government should also adopt other progressive tax measures, such as a wealth tax.

The case of Sri Lanka reflects the challenges many governments face under the current international tax system. For example, tax competition pressures governments into offering tax incentives that fuel a race to the bottom, depriving many governments of the necessary revenue to fulfill human rights. These challenges highlight the importance of ongoing negotiations for a United Nations tax treaty to build international rules informed by human rights imperatives and increased cooperation that would enable governments to end this negative spiral.

Under international human rights law, states are obligated to take steps to the “maximum of their available resources” to progressively realize the rights to health, education, social security, and an adequate standard of living, among other economic, social, and cultural rights. States are obliged not only to act individually, but also through international assistance and cooperation. This necessarily implicates states’ fiscal practices and tax policies domestically and in international fora.

Sri Lanka’s new government has taken some positive steps, such as providing an LKR 6,000 (about $20) bursary to some families to help with education-related costs, but it has only marginally raised the education budget. It should continue to increase the education budget, with a goal of reaching the internationally agreed benchmark of 4 to 6 percent of GDP allocated to education, Human Rights Watch said. The government of President Dissanayake should also urgently adopt measures to uphold its human rights obligations and enact reforms to a system that currently favors companies and wealthy people while failing to deliver adequate revenues.

“Sri Lanka’s economic quagmire makes clear that growth alone is not enough to fulfill human rights,” Saadoun said. “The government should finally establish a progressive tax system and use its income so that it adequately funds education and other public services that benefit all Sri Lankans.”


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US embassy won’t comment on IGP’s probe into joint drug raid

Published

5 hours ago

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2026/09/17

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Drugs taken into custody (pic courtesy US Embassy)

… America-Pakistan developed required ‘intel’ for operation

By Shamindra Ferdinando

The US Embassy in Colombo declined to comment on a special police probe into the recent narcotics detection, jointly made at the China-managed Colombo International Container Terminal (CICT) by the US Drug Enforcement Administration’s (DEA) New Delhi Country Office and Sri Lanka Police..

US Embassy spokesperson said that the mission wouldn’t add to their press release, issued on 2 Sept., in the immediate aftermath of the raid.

Police Headquarters, on 11 Sept., declared that the Central Crime Investigation Bureau (CCIB) was conducting investigations into the recovery of 473 kg of Crystal Methamphetamine (‘Ice’). Police never acknowledged the role played by the US in the operation.

According to Police Headquarters, on a directive given by IGP Priyantha Weerasooriya, the Special Investigation Unit has launched an internal probe into, what it called, shortcomings and irregularities in the Colombo Port raid.

The Island:

Have you (relevant US authorities) received an update of Sri Lanka’s investigations from the Police?

US Embassy:

U.S. and Sri Lankan law enforcement authorities maintain close and ongoing cooperation on counternarcotics matters, including the exchange of information that helps both countries combat transnational drug trafficking. We don’t have anything further to share on communications with Sri Lankan authorities beyond what we’ve already said publicly about the successful operation.

The Island:

Did the Police seek clarification regarding DEA, New Delhi Country Office role in the successful raid?

US Embassy:

As the Embassy noted publicly following the seizure, cooperation with the U.S. Drug Enforcement Administration contributed to the Sri Lanka Police Narcotics Bureau’s successful seizure of approximately 463 kilograms of methamphetamine at the Port of Colombo.

The seizure demonstrates the value of close U.S.-Sri Lankan cooperation in disrupting transnational narcotics trafficking.

The Island:

Before we raised this issue were you aware of the internal investigation into the drug bust which was also raised in Parliament last week?

The US Embassy:

We don’t have anything further to share beyond what we’ve already said publicly about the successful operation.

Our focus remains on the strong U.S.-Sri Lanka law enforcement partnership and the concrete results our cooperation can deliver—disrupting transnational criminal organisations, cutting off the profits that fuel illicit drug trafficking, and protecting our citizens from the dangers of narcotrafficking.

The US Embassy attributed the success of the counternarcotics operation to the US-Sri Lanka partnership

The US Embassy statement, dated 2 Sept: The U.S. Drug Enforcement Administration’s (DEA) New Delhi Country Office and Sri Lanka’s Police Narcotics Bureau (PNB) conducted a successful joint operation disrupting a Pakistan-based narcotrafficking network attempting to smuggle crystal methamphetamine through Sri Lanka to international markets.

Acting on intelligence developed by DEA’s Foreign Counterparts Unit Pakistan Anti-Narcotics Force Special Investigations Cell between August 14–29 on suspicious maritime containers moving from Pakistan to Colombo, PNB seized approximately 463 kg of crystal methamphetamine with a street value of $21 million, concealed in bath towels, and arrested several suspects, including Pakistani nationals. This operation underscores the strength of the U.S.-Sri Lanka partnership in dismantling transnational criminal organisations that fund terrorism and threaten communities in both our countries. This cooperation builds on long-standing training and technical assistance provided through the U.S. Department of State’s Bureau of International Narcotics and Law Enforcement Affairs (INL) to the Sri Lanka Police and Customs. The United States remains committed to working with Sri Lanka and regional partners to aggressively pursue transnational criminal organizations, deny them the revenue from illicit drug trafficking, and protect our citizens from the dangers of narcotrafficking.”

SLPP National Organiser Namal Rajapaksa, in Parliament, raised questions about the internal investigation into the raid. However, Rajapaksa, too, hasn’t mentioned the US role in the operation. The Special Investigation Unit has recorded a statement from Senior DIG Ranmal Kodituwakku regarding the Colombo Port raid.

MP Rajapaksa questioned the rationale behind questioning the officer who led the raid against the backdrop of controversial releasing of 323 containers from the Colombo Port in January 2025. The failure to question those responsible for the releasing of 323 containers indicated who was behind that operation, MP Rajapaksa told Parliament.

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Gnanasara Thera declares outside High Court that he wouldn’t flee

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5 hours ago

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2026/09/17

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Gnanasara Thera

Bodu Bala Sena (BBS) General Secretary Ven. Galagodaaththe Gnanasara Thera appeared before the Colombo High Court yesterday in a case filed by the Attorney General over statements allegedly insulting Islam.

The case was taken up before Colombo High Court Judge Buddhika C. Ragala, who ordered that it be called again on September 30.

His appearance came six days after the Supreme Court invalidated the presidential pardon granted to Gnanasara Thera by former President Maithripala Sirisena in 2019.

Speaking to journalists outside the court, Gnanasara Thera said he was prepared to face the legal process and would abide by the law, rejecting reports that he had gone into hiding following the Supreme Court judgment.

“It is the weak who disappear and flee. We worked for the country and are facing the consequences for that. We are not afraid and will not flee,” he said, noting that he would surrender to the court and face whatever legal consequences following the Supreme Court decision.

The Supreme Court, on September 10, ruled that the presidential pardon granted to Gnanasara Thera by Sirisena was invalid. The judgment followed fundamental rights petitions challenging the legality of the pardon. A three-judge bench, comprising Justices Janak de Silva, Sobhitha Rajakaruna and Sampath Abeykoon, delivered the ruling.

Gnanasara Thera was convicted by the Court of Appeal in 2018 for contempt of court and sentenced to a total of 19 years’ imprisonment to run concurrently as six years. The conviction related to his conduct during proceedings at the Homagama Magistrate’s Court concerning the disappearance of Prageeth Eknaligoda.

He was released from Welikada Prison on May 23, 2019, after then President Maithripala Sirisena had granted him a presidential pardon.

The Supreme Court found the pardon to be arbitrary and invalid in law, following its consideration of the petitions challenging the exercise of the presidential power of clemency.

Meanwhile, police have said they are awaiting the Supreme Court judgment before determining what further action should be taken following the invalidation of the pardon.

The proceedings before the Colombo High Court yesterday are separate from the contempt of court case that resulted in the six-year sentence. They concern alleged statements made by Gnanasara Thera regarding Islam.

In June this year, the Colombo High Court rejected an appeal by Gnanasara Thera against a nine-month prison sentence imposed by the Colombo Magistrate’s Court in connection with statements made at a 2016 media briefing that were found to have disrupted religious coexistence.

The latest High Court proceedings, therefore, form part of separate legal action concerning his alleged remarks about Islam, while the Supreme Court ruling relates specifically to the legality of the 2019 presidential pardon granted in connection with his contempt of court conviction.

The case before the Colombo High Court will be called again on September 30.

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Namal further remanded

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5 hours ago

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2026/09/17

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MP Namal Rajapaksa being taken out from the Colombo Fort Magistrate’s court yesterday

Colombo Fort Magistrate Pasan Amarasena yesterday (16) ordered SLPP National Organiser Namal Rajapaksa, MP, to be further remanded, until September 23. The Magistrate issued the order when Rajapaksa was produced before the court as a suspect in an investigation into an alleged USD 2 million bribe case connected to the acquisition of aircraft for SriLankan Airlines.

The Magistrate issued the order following the submissions made by Deputy Solicitor General Janaka Bandara, appearing on behalf of the Criminal Investigation Department (CID).

President’s Counsel Anil Silva, along with other attorneys representing Rajapaksa, also made submissions before the court.

The Magistrate also announced that a decision on Rajapaksa’s bail application would be announced on 23 September.

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