Business
Tax collection measures contribute to increase in tax revenue in 1H 2024
However, share of revenue from direct taxes said to have reduced to 26.1 percent
by Sanath Nanayakkare
Apart from a slew of taxes that were imposed on individuals, corporations and withholding taxes on various monetary transactions with effect from January 2024, the strengthened tax collection measures also have contributed to the increase in state revenue, according to the mid-year fiscal report issued by the Ministry of Finance.
The report indicates that mandating financial institutions to submit details of individual taxpayers’ transactions to the Department of Inland Revenue has been a key contributor in this regard.
Apart from that, making electronic tax filing mandatory for individual income taxpayers, streamlining the refund process, expediting refunds of amounts paid in excess and, discouraging cash transactions by not allowing such transactions in one day or in a single transaction or in a single event in aggregate to Rs. 500,000 or more to be deducted as expenses for tax purposes also have helped accrue more revenue to the state coffers.
Further, several policy decisions made to strengthen tax administration such as the issuance of a regulation for the regular exchange of information by individuals including government agencies with the Commissioner General of Inland Revenue have brought its dividends on the revenue share of the government.
In nominal terms, the revenue collection from VAT increased significantly by 85.4 percent to Rs. 616.9 billion in the first half of 2024 compared to Rs. 332.7 billion in the same period of 2023, realizing 44.1 percent of the annual estimate for 2024. Revenue from VAT on domestic activities increased by 49.8 percent to Rs. 353.4 billion while revenue from VAT on imports increased significantly by 172.2 percent to Rs. 263.6 billion in the first half of 2024.
With the growth in revenue from VAT and from taxes on external trade, the share of revenue from direct taxes out of the total tax revenue has reduced to 26.1 percent in the first half of 2024 compared to 32.1 percent recorded in the same period of 2023. In the first half of 2024, the realization of tax revenue collection was 44.7 percent of the estimate of Rs. 3,820.0 billion for 2024
“In nominal terms, the revenue collection from VAT increased significantly by 85.4 percent to Rs. 616.9 billion in the first half of 2024 compared to Rs. 332.7 billion in the same period of 2023, realizing 44.1 percent of the annual estimate for 2024. Revenue from VAT on domestic activities increased by 49.8 percent to Rs. 353.4 billion while revenue from VAT on imports increased significantly by 172.2 percent to Rs. 263.6 billion in the first half of 2024,” the report stated.
From a macroeconomic perspective, the strengthened tax administration has had clear advantages. However, the reports indicates that the share of revenue from direct taxes out of the total tax revenue has reduced to 26.1 percent in the first half of 2024 without giving details as to how this has happened.
Business
Ceylon Chamber’s Investment Summit 2026 to steer Sri Lanka beyond stabilisation
Sri Lanka’s national economic discourse takes center stage today as the country’s premier private-sector body, The Ceylon Chamber of Commerce, hosts the Sri Lanka Economic & Investment Summit 2026 at the Shangri-La Colombo.
Convening on October 12 and 13, the two-day summit brings together an influential gathering of senior policymakers, international financiers, multilateral development partners, and private-sector captains to chart the island’s next phase of macroeconomic growth.
Held under the theme “Positioning Sri Lanka in a Changing Global Economy: Resilience, Reform, and the Future of Economic Policy,” this year’s forum marks a critical inflection point in the nation’s post-crisis trajectory.
As Sri Lanka shifts its emphasis from immediate financial stabilization toward sustainable, long-term expansion, the summit aims to address the structural imperatives necessary to secure high-impact foreign direct investment (FDI), deepen regional trade integration, and unlock emerging sectors of economic activity.
The core agenda over the two days focuses on building resilience across volatile global market cycles while executing targeted policy reforms. Key working sessions will examine:
Regional Value Chains & Trade Integration: Leveraging Sri Lanka’s strategic Indian Ocean geography to capture higher-value export flows and commercial linkages.
Energy & Infrastructure Transformation: Accelerating renewable energy integration and modernizing national utility policy.
Digital Economy & Public Modernization: Deploying digital technologies across public administration and financial services to enhance operational efficiency and transparency.
Sectoral Priorities: Modernizing healthcare infrastructure and agricultural value-addition to build a robust domestic economic base.
A defining feature of this year’s summit is the strong convergence between state policy and global commercial expertise. Keynote addresses and panel discussions will feature prominent leaders, including Prime Minister Dr. Harini Amarasuriya and T. Krishnakumar, Chief Executive Officer of Reliance Consumer Products Ltd.
They will be joined by senior delegations and policy experts from major global institutions, including:
= The Asian Development Bank (ADB)
= The International Finance Corporation (IFC)
= Standard Chartered Bank
= Zydus Lifesciences
The active participation of the country’s highest executive and legislative leadership across both days underscores a clear policy commitment to private-sector-led growth. By establishing a direct, high-level platform for dialogue between investors and policymakers, the Ceylon Chamber’s summit seeks to refine regulatory frameworks, improve the ease of doing business, and establish a clear, predictable environment for capital formation in the years ahead.
Business
White House blocks Microsoft from foreign worker hiring programme
Microsoft and several other technology firms have been barred by the White House from hiring skilled international workers on a permanent basis through a widely used visa programme.
US Vice-President JD Vance on Thursday accused Microsoft alongside other firms of committing fraud through the use of the H-1B visa programme and a related process for workers from abroad to become permanent US residents.
Vance claimed that Microsoft, one of the most valuable companies in the US, has been effectively replacing American workers with “foreign indentured servants.”
Microsoft said most of the H-1B visas filed over the last financial year were for existing workers, who are paid the same as local staff.
“No company in the US has abused this system more than Microsoft,” Vance said.
He also made similar accusations about Adobe, Cognizant, Infosys, Tata, Wipro, HCL and Capgemini.
The US government will not process any new or pending Permanent Labor Certification Program (PERM) applications from Microsoft or the seven other companies, Secretary of Labor Keith Sonderling said during the same conference.
Sonderling said companies like Microsoft, as well as US universities, have turned into “visa mills” that were “flooding” the US with foreign workers.
The BBC has contacted all of the companies for comment.
The total number of H-1B visas, a precursor to anyone seeking to go through the PERM process, is capped at 85,000 per year.
A spokeswoman for Microsoft noted to the BBC that “the vast majority of Microsoft employees in the United States are Americans.” The company employs more than 200,000 people worldwide.
Business
ComBank unites stakeholders to prepare agri sector for El Niño
In response to emerging climate risks, the Commercial Bank of Ceylon has launched a proactive initiative through its Development Credit Department, to equip Sri Lanka’s agricultural sector against the potential impacts of the 2026 El Niño climate pattern.
Seeking to move the industry from reactive loss management to early climate preparedness, the Bank partnered with leading state universities to execute a two-part educational and technological intervention in September 2026.
The initiative comes at a critical juncture. Sri Lanka’s Department of Meteorology reported an 80% probability of El Niño conditions emerging between June and August 2026, with effects expected to persist through November and beyond. As highlighted by the Food and Agriculture Organization (FAO), El Niño acts as a risk multiplier for rural livelihoods, food production, and water supply.
To mitigate these threats, the Bank’s initiative creates a collaborative network uniting academic institutions, agricultural extension services, technology providers, farming communities, and the financial sector. The awareness programme on El-Niño and its impact on agriculture was supported by 12 Commercial Bank branches, and engaged with more than 1,100 farmers at 15 diverse locations, including Vattapalai, Muththajankaddu, Palampas, Oddusuddan, Siyambalanduwa, Lindula, Neluwa, Kalawana, Pannala, Madampe, Mannar, Vavuniya and Kumalamunai.
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