Features
Unexplored options to raise revenue
by Neville Ladduwahetty
What Sri Lanka has achieved since it declared itself insolvent is hailed by some with much optimism. The “relative stability” currently experienced is presented by the Governor of the Central Bank “as the outcome of a united effort from the outset” (The Island, December 26, 2023). The focus of that collaborative effort was on monetary policy as stated by the Governor who went on to add, “Now the Central Bank has independence that insulates monetary policy from political interference and thus the institution has been strengthened. The other side of the coin is the government’s fiscal policy. People elect their representative to make fiscal policy to direct the economy…” (Ibid). This separation of responsibilities holds the government and the Parliament collectively responsible for the impact of its fiscal policies on the livelihood of the People through the choices reflected in the 2024 Budget as it has been with previous Budgets.
For instance, the choices made were that expenditure should be Rs.6.98 Trillion and the projected Revenue should be Rs.4.107 Trillion resulting in a deficit of Rs.2.88 Trillion. This in a nutshell was the decision of the Government and that of the majority in Parliament when they passed the Budget. The bulk of the projected Revenue of Rs. 4.107 Trillion reflects an increase of the 2023 Budget by 1.27 Trillion (45%). The taxes that are of relevance to the comments addressed below to meet this increase are those collected from VAT amounting to 720 Billion and only Rs. 50 Billion from personal taxes (Public Finance Data and Analysis).
While the attention and preoccupation of the Central bank and the Government over the last two years was on monetary and fiscal policies, the social impact of the crisis on the People appear to have received less attention, judging from the priorities selected to raise revenues.
SOCIAL IMPACT of CRISIS
The Ceylon Today of December 27, covers a few key features from a report released by the Department of Census and Statistics (DCS) on December 22. The DCS report stated that ” survey findings indicate that currently 54.9 per cent of households in Sri Lanka are currently indebted,…The highest proportion of indebtedness is from mortgage matters (31 per cent) followed by banks (21.9 per cent) and the money lenders (9.7 per cent) … 91 percent of the households experienced an increase in their total average monthly expenditure, 22 percent of households have got indebted due to the economic crisis, the schooling of 54.9 percent of individuals (aged 3 – 21) was also affected by the economic crisis and 7 per cent of total population changed their health treatment procedures… Among households that reported an increase in their average monthly expenditure, the most commonly reported reason, accounting for 99.1 percent, was the increase in food expenses”.
Continuing the DCS report states: “The primary strategy adopted by the majority (53.2) percent of guardians/parents of school going children affected by the economic crisis was to either reduce their expenditure on new stationery or to completely stop such purchases…as new uniforms…. Additionally, reducing the frequency of attending tuition classes” (Ibid).
RAISING PROJECTED REVENUE
The social background presented above is the context in which projected revenue is to be raised. In addition, “Nearly half of the labour force receives less than Rs. 30,000 monthly salary while 3.91 million families out of 5.8 million families are seeking state assistance to continue their livelihoods” (Daily Morning, December 28, 2023). In short, IF 2/3 of the families are receiving state assistance, they are not in a position to contribute to the projected increase in revenue of Rs. 720 Billion from VAT.
On the other hand, the personal taxes of only Rs. 50 Billion are collected from those who, at a minimum are assured of food security while additional VAT taxes amounting to Rs. 720 Billion, which is 14.4 times personal taxes, have to be collected from a much broader swath of the population, the majority of whom are victims of food security.
This reflects the imbalance in the choices opted for when formulating fiscal policy. Whether this imbalance, particularly in regard to VAT, is the result of preferences of the IMF as a ready means of raising revenue or from sections of society with influence, is not known. Whatever the case may be, IF the economic situation in the country as reflected in the surveys conducted by the Department of Census and Statistics is taken into account with the seriousness it deserves, imposing the burden of the increased VAT on an already beleaguered populace could lead not only to political instability but also the inability to raise the projected contributions from VAT. Furthermore, if the preoccupation of a large section of the population is on survival and other priorities, a drop in demand due to increased hardships is bound to have an impact on inflation.
The potential of these collective consequences could very well outweigh the expectations of improved stability hoped for. On the other hand, it would be prudent to explore options that have not been explored before to raise revenues at a minimum cost to the vulnerable.
EXPLORING OPTIONS to RAISE REVENUES
One area that has not been explored, except for passing reference, is taxes relating to property. The reluctance to do so may be because property taxes impact those who own property. On the other hand, advanced economies use property taxes as the source to fund primary and secondary education and other community-based services. Since such practices do not exist in Sri Lanka, it is imperative that current practices adopted to assess property values are reviewed and drastically revised.
For instance, within the Municipality of Colombo there are properties with a market value of over Rs. 100 Million, yet their annual property taxes are in the range of Rs. 2500 to 3000; not enough to cover the cost of garbage collection. In more exclusive neighborhoods the property taxes are in the range of 0.05 % of their market values even for new high-rise units.
The Colombo Municipality is reported to collect Rs. 5.7 Billion in property taxes. There are 13 other Municipalities in the rest of Sri Lanka. Taking into account that they are not as affluent as Colombo, they could perhaps contribute about Rs. 3.0 Billion each by way of increased property taxes. Thus, if property taxes are significantly increased collectively, the total contribution could be in the range of about Rs. 40 to 45 Billion, which incidentally is close to the Rs. 50 Billion by way of personal income tax figured as contributing to meet the increase in Revenue needed by the 2024 Budget. If increased property taxes at the rate of 1 Billion each from the 37 Urban Councils are added, they too could contribute an additional Rs. 30 to 40 Billion, thus making the total contributions from property taxes significant enough not to be scoffed at.
Over the last two years, Sri Lanka has been actively engaged with the IMF on issues relating to Debt Restructuring. One of the primary issues raised by the IMF is the need to increase Revenues with a view to reducing Budget deficits. Over these two years, the Inland Revenue Department should have been aware that it would be called upon to play a major role in this exercise.
Despite this awareness, the number of files relating to Personal Income Tax increased from 204,467 to 500,196 ONLY “by end November 2023” as admitted by the Commissioner of the IRD at a Presidential Media briefing. The Commissioner had also stated that “it was possible to raise (taxes) to 1,500 billion by widening the tax base and by changing tax rates,” (ECONOMYNEXT, December 29, 2023).
Since this represents a 50% increase over the 2019 tax Revenue, the awareness of such a possibility would have convinced the Government that the policy of raising Revenues from VAT to the extent reflected in the 2024 Budget would amount to an overkill with serious social implications.
The two hundred thousand plus files that had existed throughout 2023 represent ONLY ONE per cent of the population, which according to the UNDP Country Economist, Dr. Gunasekara “owns 31% of the total personal wealth in the country, while the bottom 50% owns less than 4% of the overall wealth in the country” (Daily FT, December 21, 2023).
Had the IRD exercised due diligence over the past years and in particular during the last two years, the country could have secured a significant amount of funds to mitigate not only past Budget deficits, but also the 2024 Budget to the point of reducing the funds needed through VAT, thereby easing the burdens on the “bottom 50%”, most of whom are already victims of poverty.
Another serious omission is the reluctance of the Government and the Central Bank to repeal the existing Exchange Control Act with a view to exercising greater control and jurisdiction over Dollar funds that are involved in foreign transactions. Such a measure has the potential to improve reserves without having to resort to the temptation of more loans that someday have to be restructured and paid back.
CONCLUSION
The primary aim of the Central Bank and the Government appears to have been to please the IMF in order to secure the long-awaited second tranche of the 2.9 Billion loan. The compulsion for this is because continued funding from the IMF would be viewed favourably by the international community to seek further loans.
The hard reality is that all the government can hope for is to explore fresh sources of raising revenues with the view of mitigating the burdens imposed not only on those that contribute to employment but also the vulnerable sectors of society. For instance, manufacturing and other sectors that provide employment have already expressed their deep concerns about the negative impact of raising additional revenue from increased VAT. Furthermore, the situation of the bottom 50% especially regarding food would be more acute than it currently is; a fact that would have a direct bearing on the ability to raise the projected revenues. How their frustrations are going to manifest, particularly in an election year, is not known. What is known to them, however, is the awareness that they ultimately are the victims who end up paying the price for the misguided policies of failed governments and interest groups.
A report in The Daily Morning titled, “South Asia’s food crisis is alarming” states: “Misguided priorities combined with short-term political thinking have made South Asia the epicenter of the world’s food insecure – hunger zone… According to the FAO’s latest report… many struggle to manage two square meals for their family. Clearly, government policies on food accessibility and distribution are not working on the ground. The underlying problem runs deep as 74.1 percent of Indians, 82.8 percent of Pakistanis, 76.4 per cent of Nepalis, 66.1 percent of Bangladeshis and 55.5 percent of Sri Lankans face serious difficulties in managing a healthy meal for their family” (December 29, 2023).
Although Parliament approved the 2024 Budget, it is too early for the populace to experience the full impact of its provisions. Therefore, instead of waiting for the bottom 50% to experience its full impact and face its consequences, it would be more prudent for the Government to explore hitherto unexplored options on lines similar to those presented herein, and take steps to mitigate the severity of the measures and policies in the 2024 Budget so that, they could breathe easier in these grim times and sustain the “relative stability” currently experienced.
Features
Combining local resources,traditional knowledge and science to build a food-secure Sri Lanka
World Food Day 2026: Innovating today for a better food future
by Dr. Kaushalya Wijayasekara
What will be on the Sri Lankan dinner table ten years from now? Will our children be able to get nutritious food at a price their families can afford? Will farmers be able to grow enough despite changing weather and rising costs? And how much of the food we produce will actually reach the consumer, instead of being lost or wasted along the way?
These questions can’t wait. A farmer faces unpredictable weather. A family faces rising food costs. Fruit goes unsold after a good harvest. Some children do not get enough nutrition. The future of food is tied to the future of Sri Lanka itself.
World Food Day 2026 is a chance to look beyond the immediate problems and ask whether we can build a food system that feeds our people well, gives farmers better opportunities, protects the environment and makes better use of what we already have. The answer can be yes, but we will have to think differently.
We are not starting from zero. Sri Lanka has diverse crops, fisheries, traditional food knowledge, indigenous varieties, research institutions, universities and a young generation able to create new solutions. What we need is to bring these together and act. Producing more will not secure our food future on its own. It will depend on how intelligently we produce, process, preserve, distribute and consume food.
Making more of what we already have
Innovation does not always mean inventing something new. Often it means finding better uses for the resources we have.
Sri Lanka grows traditional rice varieties, kurakkan, green gram, cowpea, jackfruit, breadfruit, cassava, sweet potato, coconut and palmyrah. All of them have great potential for modern, nutritious, value-added foods. Jackfruit and breadfruit can be made into flour and other convenient products. Traditional rice varieties can go into new foods that suit changing consumer needs. Palmyrah, with its strong cultural heritage, can create new income through better processing, packaging, quality assurance and market development.
The aim is to connect our traditional food knowledge with modern consumer needs and technology, while keeping our food heritage.
Stop wasting the food we produce
Reducing food loss and waste should be a major priority. Seasonal fruits such as mango, banana, papaya and pineapple can be lost in large quantities when production exceeds demand or when storage, transport and processing facilities are inadequate. With suitable technology, these fruits can become dried products, pulps, powders, beverages and other shelf-stable foods.
Agricultural and fisheries by-products are resources too. They could be turned into food ingredients, animal feed, bio-based products and other useful materials, which would move us toward a more circular food economy.
Technology alone is not enough. We need stronger local processing facilities, cold storage, efficient transport, collection centres and market information systems, especially close to where food is produced. Cutting food loss raises the value of what our farmers and fishers already produce.
Nutrition and food safety come first
Food security means more than having enough food. People also need food that is safe and nutritious.
Sri Lanka can develop affordable, nutritious foods from local pulses, grains, vegetables, fruits and fish. Children and other vulnerable groups should get particular attention. Schoolchildren in particular deserve a focus: safe, nutritious, locally sourced products for school feeding programs would support child nutrition, local farmers and domestic food industries at the same time.
Food safety must stay at the centre of food innovation. Good hygiene, quality control, laboratory testing, traceability and appropriate food safety systems are what make new products safe as well as attractive and nutritious.
A food system that can cope with climate change
Climate change is already affecting agricultural production, water availability, crop yields and food prices. We need food systems that can handle changing conditions. That means climate-resilient crops, efficient water use, soil and water conservation, better storage and resource-efficient food processing.
Traditional knowledge matters here. Generations of Sri Lankan farmers have developed practices suited to local climates and ecosystems. Combining that experience with modern science can give us solutions that fit local conditions and are sustainable. Technology alone will not build the future of food. Science, experience and local knowledge together can.
Give young people a bigger role
Sri Lanka’s universities have an important part to play in shaping our food future. Young people should be encouraged to identify real problems in the food system and work on practical solutions in areas such as food waste, sustainable packaging, nutrition, food safety, modernising traditional foods and digital technologies.
A good research project should not always end as a research paper. Where appropriate, research should be supported to move on to products, technologies, enterprises and community solutions. That needs stronger partnerships between universities and industry, along with mentoring, research funding, business support and market connections. If young researchers and entrepreneurs can turn their ideas into viable food innovations, both consumers and producers will benefit.
A pathway designed for Sri Lanka
We do not need to copy food-system models from other countries. We can build a pathway that suits our own resources, culture and needs. It would bring together local resources, traditional knowledge, scientific research, appropriate technology and entrepreneurship, with farmers, fishers, universities, research institutions, food industries, entrepreneurs and policymakers working side by side.
The goal goes beyond selling raw materials. We need to create more value, reduce waste, improve nutrition, generate jobs and strengthen rural livelihoods. This matters especially for small and medium-scale food enterprises, which can drive local economic development when they get the right technical, financial and market support.
The choices we make today
The food future will not create itself. It will be shaped by what we grow, what we research, what we process, what we consume and what we choose not to waste.
So, the question for World Food Day 2026 is this: what can we do today so that every Sri Lankan has safe, nutritious, affordable and sustainable food tomorrow?
The answers are already around us, in our farms, fisheries, food businesses, universities, laboratories and communities. We have the resources, the traditional knowledge, the scientific expertise and talented young people. What we need now is to connect them and act.
A better food future begins with the choices we make today.
Dr. Kaushalya Wijayasekara
Senior Lecturer, Department of Biosystems Technology, Faculty of Technology, University of Ruhuna
Features
20th Anniversary of Digampathana blast – the day Sri Lanka Navy cried
By Admiral Ravindra C Wijegunaratne
WV, RWP and Bar, RSP, VSV, USP, NI (M) (Pakistan), ndc, psn, Bsc
(Hons) (War Studies) (Karachi) MPhil (Madras)
Former Navy Commander and Former Chief of Defence Staff
Former Chairman, Trincomalee Petroleum Terminals Ltd
Former Managing Director Ceylon Petroleum Corporation
Former High Commissioner to Pakistan
The Digampathana suicide truck attack on 16th October 2006 remains the deadliest single strike in Sri Lanka Navy history, leaving scars that time cannot erase.
It was a seemingly ordinary Monday morning on 16 October 2006, but the calm of that day would soon be shattered in a way none of us could have imagined. As the Commandant of the Naval and Maritime Academy and Flag Officer Commanding Naval Fleet at Trincomalee, I was aware that a number of my cadets were travelling that morning, part of a convoy of fifteen buses carrying naval personnel from Trincomalee, Colombo, and other bases, heading toward Dambulla to rendezvous with another group. The convoy also included trucks and escort vehicles, a routine movement planned and coordinated with the army to ensure the roads were clear. The morning started quietly. Some personnel greeted friends, handed over their weapons, or strolled to a nearby tea shop. It all seemed so ordinary—too ordinary for what would come next.

Sri Lanka Navy sunk LTTE Ships carrying arms, ammunition and warlike materials thousand miles away from Sri Lanka in Indian Ocean in September and October 2007.
By late morning, both convoys had reached the small ground at Digampathana, near the Sigiriya junction, and personnel mingled briefly, unaware that a carefully orchestrated act of terror was waiting. Then, suddenly, an empty half-truck veered directly into the convoy. It exploded with a ferocity I can still recall as if it were yesterday. Nuts, bolts, and high explosives tore through the air. Pandemonium erupted instantly. I later learned that 107 of our naval personnel were killed on the spot and another 153 critically injured. The scene was indescribable—bodies scattered, vehicles mangled, personal effects strewn across the ground. I remember later hearing that the head of the suicide bomber was recovered more than 100 meters away from the blast, a grim testament to the sheer force of the explosion.
I was in my office at the Naval and Maritime Academy when my mobile phone rang. A young midshipman from the 21st intake called, his voice trembling: “Sir, there was a huge explosion at the convoy point! Many are dead … my batch mate Wijesundara is among them.” I immediately jumped into my jeep with my escort Chief Petty Officer and driver and rushed to Digampathana, relying on every ounce of my driving skill to reach the scene. The journey, which usually took little more than an hour, felt endless that day, each passing mile weighed down by dread.
When I arrived, I was confronted with a sight that no training can prepare you for. The injured were being rushed to Dambulla Hospital, where doctors and nurses worked tirelessly, improvising in ways that saved lives despite the overwhelming chaos. I went back to the site after visiting the hospital. The remains of our naval personnel were scattered across the ground, and someone had begun collecting weapons and protective gear. I immediately contacted Surgeon Rear Admiral Nico Jayasekara and received his instructions: collect all body parts in separate bags and transport them to the Trincomalee Naval Hospital mortuary. This gruesome work had to be done with care and dignity, and it filled the icebox in my vehicle. Through DNA testing initiated by Rear Admiral Nico, we were able to identify every naval personnel lost that day, bringing some closure to grieving families.
The Navy Commander at the time, Vice Admiral Wasantha Karannagoda, was devastated. I had worked closely with him and knew how deeply he cared for his men. He ensured that the fallen were honoured with full ceremonial naval funerals at Welisara Naval Base, attended by families and comrades. Sixty-seven funerals were conducted in a single day—a number that still haunts me.
The Digampathana attack remains the largest single loss of naval life in our history. It was a day of sorrow, but also a day that reinforced our resolve. The tragedy galvanized the Navy to target the LTTE Sea Tiger wing with renewed determination and reshaped our maritime operations forever. Every time I think of that day, I remember not just the lives lost, but the courage, professionalism, and dedication of those who survived, those who treated the injured, and those who ensured the fallen were honored properly. May the souls of our naval hero’s rest in peace, their sacrifice guiding us and inspiring generations of naval personnel to come.
Features
‘Murder at Whitby Abbey’
Tales of Mystery and Suspense – 24
I was intrigued by the title of a book I found in a book drop at the condominium of a friend, Murder at Whitby Abbey, and I brought it home with me though I will not be able to return it in the near future. It was described on the cover page as ‘a standout in the crowded medieval mystery field’, though I fear I do not know of other books in this field, apart from the Cadfael series, which I have dealt with earlier.
The book, by Cassandra Clark, is set during the reign of Richard II and has as a backdrop his precarious position, which led to his being replaced, and murdered, by his cousin Henry, who reigned as Henry IV. It is a gloomy book, the action taking place in the twelve days of Christmas leading up to the Epiphany. And the gloom is pervasive, even though this is supposed to be a time of festivity, with mummers performing, and many of those in the guest house where the heroine stays going to town to enjoy themselves, with much drinking and much music, which also fills the guesthouse.
The heroine Hildegarde is a nun, sent to try to acquire a relic being sold by Whitby Abbey, though this was also a penance set by the Abbot of the monastery that governed her abbess because she had had sex with a man. Soon after she and her companions reach the Abbey set high on a cliff, she finds that there are other bidders, and soon suspects that the hierarchy, not perhaps the Abbot who seems a weakling, but his rapacious bursar, is determined to make money, and not above creating false relics to sell to several aspirants.
After Hildegarde and her Cistercian companions – Whitby is a Benedictine Foundation – two monks, Gregory and Egbert, and a young priest Mark, reach the abbey, they find that Aelwyn, a monk they had met on their way to the guesthouse had died. This was in the apple store, and they realize, when they find the surplices of novices stuffed into the air vents, that he had been left to suffocate in the overwhelming scent of apples.
The Cistercians are asked to look into the death, perhaps because they are likely to get no cooperation from the Abbey folk, but perhaps because those in charge are keen to know what happened. And the infirmarer, an old monk, suggests Hildegarde talk to a man called Edred who worked for the bursar, and had been a friend of Aelwyn’s. But Edred too is killed, before he can keep an appointment he had made with Hildegarde, drowned in a pool near the farmhouse of the Abbey.
Meanwhile tensions arise between the fisherfolk and the abbey for the bursar wants to charge them for using the beach that technically belongs to the abbey to dry their fish and their nets. This leads to physical battles, when the guards used by the abbey, under the command it seems of the bursar whose determination to make money is not resisted by the abbot and the prior, try to storm the area where the fishermen live.
Hildegard finds out more about what had happened through two youngsters, one of whom Torold is the son of Aelwyn by a woman who worked as a prostitute for a cartel, and with whom Mark fell in love. The other works on the farm and had seen Edred meet someone near the pool, after which that someone left the place by himself. And the boy had also found in the pool a sort of dagger with the seal of the abbey.
He and his dog, and Torold who follows her, rescue Hildegarde from a man at arms who has waylaid her and tries to rape her earlier. Escaping into the abbey she was nearly been raped then by the bursar, but she managed to escape, in the process setting fire to him and the muniments room, which led, when he was rescued, to the discovery of a box with the money he said had been stolen, blame being cast on both Aelwyn and Edred.
Matters come to a head when the fisherfolk try to storm the abbey, being resisted by the men at arms stationed on the towers. But then Hildegarde realizes that behind the murders was the bursar’s clerk, whom she pursued to the cathedral. There is great drama then as she escapes from him when he tries to kill her, and then from the man at arms who had tried to both rape and kill her, but they both fall from the scaffolding she had climbed, the latter coming from a tower where he had been stationed.
Both of them think they run the rapacity of the abbey, the latter claiming to work for the nobles opposed to Richard, who is presented throughout the book as devoted to his subjects, not to power or money. But though the villains die, the bursar continues, having got over the hysteria the fire had caused and his acknowledgment then of guilt – and though the abbot and the prior seem less vicious, whether they will be able to assert themselves is questionable.
Before the climax, when the others in the guesthouse were leaving, Hildegarde found that two of them were in possession of the relic, for which they seem to have paid well. Hildegarde herself had made a derisory offer, but before she leaves the abbot gives her the relic, perhaps in gratitude for what she and her fellow Cistercians had discovered, the abbey having made as much money as it needed and more from the gullible other buyers.
Mark’s inamorata is saved from the stews because she moves in with Edred’s widow whom the bursar had thrown out of the rooms he occupied when her husband was found dead. Hildegarde had paid for lodgings, in a house run by the man who ran the brothels, but he had a kindly side and was going to finance them to make nets for the fishermen.
So, the Cistercians set off for their home as swiftly as they can to get there on the day of the Epiphany, having stopped en route to pray for King Richard whose birthday it was.
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