News
TEA shocked by 18 percent tax on vital export earner
The Tea Exporters Association (TEA) sounded an alarm in response to the impending 18 percent Value Added Tax (VAT) set to hit the tea industry from 01 January 2024.
Issuing a press release, TEA expressed serious concerns and highlighted potential disruptions to the entire tea value chain, unless a smooth operational mechanism is promptly established.
IT said: The TEA acknowledges the necessity to broaden the tax net and introduce VAT to stabilise the country’s finances. However, the Association is deeply worried about the repercussions of imposing an 18 percent VAT on a commodity primarily destined for over 90 percent export, requiring a full VAT refund to stay competitive globally. This move has raised red flags within the industry.
“”While it is understood that in order to resurrect the country’s financial stability, we have to widen the tax net and the VAT, the high VAT on a commodity, of which over 90 percent is produced and sold purely for exports, wherein all of the VAT will need to be refunded to stay competitive in the world market, the imposition of the VAT on tea has caused grave concern amongst the tea industry stakeholder,” it said.
Urging swift action, the TEA has called upon the Finance Ministry and Inland Revenue Department (IRD) to swiftly register all tea manufacturers for VAT. The Association stressed the unique nature of the tea sector, requesting special attention from the IRD. They highlighted the need for comprehensive stakeholder consultations before implementing such substantial changes, aiming to sustain the industry amid challenging global conditions.
With over 400,000 tea smallholder farmers contributing to 70 percent of tea production, 21 regional plantation companies, around 600 tea manufacturers, and more than 300 tea exporters/buyers, the tea industry’s complex network involves eight brokers conducting weekly tea auctions. However, the imminent VAT implementation poses a significant shift, requiring all 600 tea factories to register for VAT and Simplified Value Added Tax (SVAT), potentially leading to administrative hurdles and added costs.
“The last tea auction of the year concluded on December 19, 2023 and the next tea auction is scheduled for January 3, 2024. The exporters are sceptical about the ability of the tea factories getting the VAT/SVAT registration before January 1 and the fate of the first tea auction of 2024. The tea manufacturers, who are unable to get the VAT registration by January 1, will not be able to issue VAT invoices and may have to keep away from the auctions until the registrations are completed. This may have multiple effects on the tea exports, income of smallholder farmers, etc. Even foreign buyers may keep away from the tea auction temporarily, which could affect the tea prices,” the TEA statement said.
Expressing industry concerns, the TEA highlighted the potential disruption of upcoming tea auctions, impacting payments to farmers, tea exports, and the participation of foreign buyers, thus affecting tea prices.
Additionally, while the government’s gazette notification includes green leaves under VAT, the tea industry seeks assurance that this fundamental agricultural raw material might be exempt from VAT payments.
In summary, the TEA is advocating for thorough consultation, extended registration timelines, and an alternative system to ensure minimal disruption to the established tea value chain. Their primary objective remains the protection of the industry’s stability and competitiveness in the global market.
News
Parliament: Govt. questioned on returned cheques, delayed payments for disaster victims
Returned cheques, delayed payments and unresolved insurance claims dominated Parliament on Tuesday as National Democratic Front (NDF) MP Ravi Karunanayake asked the government to make statement on compensation and restoration following Cyclone Ditwah.
Raising the matter under Standing Order 27(2), Karunanayake said thousands of citizens, affected by the 28 November, 2025 cyclone, were still waiting for relief, despite a presidential directive that all compensation and restoration work be completed by 31 December, 2025.
Karunanayake told the House that affected communities were reporting “crippling delays, non-payment, returned cheques and unresolved insurance claims,” warning that the situation had left tens of thousands displaced more than a month after the deadline. “These delays raise grave concerns about transparency, administrative capacity and accountability,” he said.
Cyclone Ditwah caused widespread destruction across several districts, claiming lives and damaging homes, infrastructure, agriculture, fisheries and small and medium-sized enterprises. Karunanayake said reports indicated that around 48,000 people were still unable to return to their homes, underscoring the scale of the humanitarian and economic impact.
Full text of Karunayake’s statement: I rise under Standing Order 27(2) for an urgent Government statement on compensation and restoration after Cyclone Ditwah of 28 November 2025, which caused severe loss of life, destruction, and widespread damage. Despite a Presidential directive for completion by 31 December 2025, affected citizens report crippling delays, non-payment, returned cheques, and unresolved insurance claims. Reports suggest tens of thousands remain displaced, raising grave concerns.
For transparency, I seek clarification on:
1. Has the Disaster Management Centre formally approved a consolidated national loss and damage assessment? What is the total estimated loss and approval date?
2. What is the total restoration cost, disaggregated by housing, infrastructure, agriculture, fisheries and SMEs?
3. What is the total affected population? Provide a district-wise breakdown of casualties, displaced families, and destroyed/damaged houses. Is it correct that 48,000 persons cannot return home?
4. What compensation categories, eligibility criteria, and payment rates were approved for households, the deceased, farmers, SMEs, and others and under what authority?
5. As of 31 December 2025 and now, how many payments and total amounts have been disbursed for each band (e.g., Rs. 25,000; Rs. 50,000; Rs.1Mn for deceased; housing bands up to Rs. 10Mn), plus farmer and SME payments, by district?
6. How many eligible beneficiaries remain unpaid, by category and district and what are the principal causes (verification, documentation, banking, funding)?
7. Why have compensation Cheques been returned, how many cases exist and what remedial measures are in place?
8. What steps ensure Insurance Companies settle claims? How many claims and what value remain unpaid?
9. What donor funds (grants, loans, aid) have been received? How much has been spent on compensation vs. infrastructure and when will the International donor conference be held?
I request the Government table its response with annexed district-wise tables on assessments, allocations, disbursements, returned cheques, insurance status and unpaid balances.”
Deputy Defence Minister Major General (retd) Aruna Jayasekara said that the government needs two weeks to respond to the queries raised by MP Karunanayake.
by Saman Indrajith
News
President urges shedding of petty differences to achieve an economically strong Sri Lanka
President Anura Kumara Dissanayake yesterday called for unity, beyond petty differences, to build an economically strong Sri Lanka, declaring that the country’s greatest asset was its human resource and warning that there would be no place for racism or extremism in the nation’s future.
Addressing the 78th National Independence Day celebrations, at Independence Square, in Colombo, the President said Sri Lanka must embark on a path of rebuilding, rooted in its sovereignty, history and values, while embracing reform and progress. The national celebrations, held under the theme, ‘Rebuilding Sri Lanka’, commenced at around 7.30 a.m., paying tribute to those who sacrificed much to secure independence from British rule in 1948.
More than 4,500 personnel from the tri-forces and Police took part in the ceremony, alongside around 400 invited guests, including foreign diplomats. A special security and traffic management plan was also in effect, with over 2,000 Police officers deployed across Colombo to ensure public safety and smooth traffic flow.
In his address to the nation, President Dissanayake paid tribute to past generations who fought for the countrys freedom, describing them as heroic patriots whose sacrifices formed the foundation of the nation.
The land on which we stand today is drenched with the blood and tears of our ancestors, he said, adding that it was the duty of present and future generations to honour that legacy.
The President stressed that rebuilding Sri Lanka required drawing strength from the country’s proud history while rejecting harmful practices of the recent past. Economic development, he said, must not erode the foundations of the nation but instead be firmly rooted in the soul of the land and its people.
Emphasising the importance of human capital, the President said Sri Lanka must transform its human resources into a competitive force capable of standing alongside developed nations. He underscored the need to prioritise knowledge, unity and progress over ignorance, prejudice and division, and announced that the Government was ready to implement the most far-reaching education reforms in the country’s history to achieve this goal.
We are prepared to initiate a transformative era in education, he said, pledging to overcome resistance from outdated thinking, and expressing confidence that the people would support the reform process.
The President also highlighted the centrality of the rule of law, national unity and healthy international relations in rebuilding the country. True freedom, he said, could only be achieved through economic strength, supported by good governance and social cohesion.
Reaffirming his commitment to national unity, President Dissanayake said racism and extremism would not be tolerated, warning that both only weakened the nation. He called on all segments of society, including the Government, Opposition, public service and religious leaders, to unite with determination to rebuild Sri Lanka in every sphere.
News
PM: No withdrawal of modules introduced for Grade 6 under proposed education reforms
Prime Minister and Education Minister Dr Harini Amarasuriya told Parliament on Tuesday (3) that none of the modules introduced for Grade 6 under the proposed education reforms had been withdrawn.
Responding to a question by SJB Kurunegala District MP Nalin Bandara Jayamaha, the Prime Minister said the government was planning to implement reforms from 2027.
“Only the modules for the first term of Grade 6 have been printed so far. None of these modules has been rejected or withdrawn. They will be used when the reforms are implemented. No decision has been taken to discard them or to take any action that would result in a financial loss,” she said.
The PM said distribution of the printed Grade 6 textbooks, which had been stored in warehouses, had already commenced and that the government expected to complete the distribution of them by mid-February.
“The teaching process has already begun. As the existing syllabus remains in force, teachers are continuing instruction under the current curriculum,” the Prime Minister said.
MP Jayamaha said there had been controversy surrounding a particular Grade 6 module and sought clarification as to whether it would be withdrawn.
In response, the Prime Minister reiterated that no modules had been removed, due administrative action had been taken with regard to the relevant Grade 6 module and that the matter would be addressed appropriately.
By Saman Indrajith
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