News

Eran takes govt. to task for errant policies

Published

6 years ago

2020/09/12

By Saman Indrajith

Samagi Jana Balavegaya MP Eran Wickramaratne warned in Parliament Thursday that Sri Lanka should prepare for its worst budget deficit in 35 years and the situation, which he said was due to the policy errors of the government.

“Expenditure increases during a health crisis but that is not what has happened. Capital expenditure came down during this period. The crisis has occurred due to the collapse in government revenue. This is the policy errors, which, he said, had to be rectified urgently. He was taking part in the debate on six notifications under the Ports and Airports Development Levy Act, three Orders under the Customs Ordinance and six Orders under the Revenue Protection Act presented to the House for approval by the government.

Wickramaratne said that under the previous government, Sri Lanka had achieved and improved fiscal position after several years with the budget deficit kept at 5.3 per cent of GDP during that period.

“This however began to deteriorate by the end of 2019 because of the government‘s irresponsible statement, in the run up to the election, on taxes and while the fiscal position has deteriorated, the situation has got progressively worse in 2020.

“Government revenue has declined by 28 per cent compared to 2019. Recurrent expenditure has increased by l0 per cent. The budget deficit has increased by 41 per cent. Development spending that is capital expenditure has decreased by -1.1 per cent. And the government debt has increased by Rs. 1.020 billion in just six months rising from 13,000 billion to over 14.000 billion from January to June in 2020.”

MP Wickramaratne said that the fiscal results would get worse as the year progressed with an additional cost of a 10 per cent increase in the government staff cadre.

The import ban would begin to hit government revenue in the second half. “Corporate taxes will be sharply down and Sri Lanka should prepare for its worse budget deficit in 35 years,” he said.

The SJB MP said that in spite of the reduction in tax relief to the public there had been no benefit felt by the people. “Prices of essentials have in fact increased despite the reduction and exemption in some taxes. Food price inflation reached 12.9 in July. The national consumer price index reached 6.1 per cent in July. These are not our statistics. These are statistics coming out of government departments,” he said.

MP Wickramaratne said the previous government had been able to rectify a regressive tax system. The direct “tax percentage was 25 per cent in 2019 and 75 per cent was indirect tax. When we took responsibility for the government, the direct taxes were only 12 per cent and we have been able to correct a regressive tax system taking away or lessening burden on the poor in this country.”

The external sector as a result of the poor fiscal management had also lost the opportunity in the global capital markets and the country was paying its external debt by running down the reserves. By the middle of 2019, the government reserves had been USD 859 billion, Wickremaratne said. But within one year in June 2020, the reserves were USD 6.7 billion. Therefore, there were major debt repayments. In 2020, 2021 and 2022, Sri Lanka would have to pay mainly on sovereign bonds. Sri Lanka had another USD 4 billion debt maturing in 2020 and 2024.

The country’s debt was about 87 per cent of GDP and of this 57 per cent of was foreign debt, non-concessional as opposed to only 2.5 per cent, 15 years ago, Wickramaratne said, adding that most of the non-concessional borrowings of 75 per cent equal to US Dollars 15.3 billion were international sovereign bonds. “China has now displaced Japan as the largest bilateral creditor to Sri Lanka amounting to 12.4 per cent of government debt. Out of $ 4.1 billion of Chinese lending to Sri Lanka, only $ 760 million are classified as official bilateral debt. The rest are considered as commercial.”

MP Wickramaratne said that external debt in Sri Lanka was predominantly by the public sector and very high in relation to current account receipts. The pressure would intensify in 2020, when current account receipts would fall sharply amidst the down turn in tourism, exports, remittances and capital markets financing costs as they go up.”

He added that the government had an issue with State-Owned Enterprises (SOEs) particularly as they had issued guarantees to the Ceylon Petroleum Corporation (CPC), the Road Development Authority (RDA), the National Water Supply and Drainage Board, Ceylon Electricity Board (CEB) and SriLankan Airlines. “SOEs like CEB CPC and SriLankan Airlines are problematic for every government and therefore, we need to restructure the debt. Giving government guarantees is only manhandling the data, making the government look good.” Eventually that risk is not a contingent liability.

Wickramaratne charged that the government had mishandled the fiscal part at the beginning and then turned to the Central Bank and wanted the CB to do something about the monetary space.

“Despite the fact you forced out two members of the Monetary Board, Dr. Dushni Weerakoon and Nihal Fonseka, and despite the threat to senior members in the CB, it is not a matter of people, it is a matter of policy that you need to correct. They have done their utmost. They have provided the liquidity, but the credit growth in May, June and July has been negative. It cannot be solved only on the monetary side because you have little space on the fiscal side.”

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News

National SME Strategy Framework 2026 is critical because it brings policy consistency and stability to the sector – PM

Published

10 hours ago

2026/05/15

Priyan

The Prime Minister Dr. Harini Amarasuriya participated in the 2nd day of the dialog on “National SME Strategy Framework 2026” organized by the Ministry of Industry and Entrepreneurship Development held on Thursday [14th of May].

The official launch of the “National SME Strategy Framework 2026” to empower Small and Medium Enterprises (SMEs), was held on Wednesday (13) under the patronage of the Minister of Industry and Entrepreneurship Development, Sunil Handunnetti, and Deputy Minister Chathuranga Abeysinghe.

The Framework has been developed by the Industry and Entrepreneurship Development Ministry, with input from the SME Advisory Committee and key system stakeholders in line with the national manifesto of “A Thriving Nation – A Beautiful Life.”

This framework creates the opportunity for the entrepreneurs to easily register their businesses, access modern technology, and obtain specialized financial facilities along with the advisory services that directly support the growth of entrepreneurs, departing from the traditional method free of charge.

The second day marks the dialog on the “National SME Strategy Framework 2026” focusing on the discussion into implementation and strategy to action featuring series of panel discussions.

During the event National SME Strategy Framework 2026 was presented to the Prime Minister by the Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe.

The Prime Minister stated that the country is implementing its transformative agenda during a period of global instability and disruptive global context stressing the importance of adaptation, sustainability and building resilience, particularly within the Small and Medium Enterprise (SME) sector in such context.

Underscoring the importance of the SME policy framework, the Prime Minister further stated that the government’s role is to ensure consistency, stability and collaboration within the sector.

The event was attended by the Minister of Industry and Entrepreneurship Development, Sunil Handunnetti, Deputy Minister Chathuranga Abeysinghe, Australian Deputy High commissioner to Sri Lanka, Ms. Ruth Baird and Secretary to the Minister of Industry and Entrepreneurship Development Mrs. J.M. Thilaka Jayasundara and develop and develop partners and representatives from business community.

[Prime Minister’s Media Division]

News

Opposition accuses govt. of weaponising tax laws

Published

12 hours ago

2026/05/15

Thilina Walpola

Sajith

… calls for modernising Inland Revenue Dept.

Opposition and SJB Leader Sajith Premadasa yesterday criticised the government’s proposed amendments to the Inland Revenue Act, claiming that a new provision in the draft legislation could unfairly lead to criminal action against ordinary citizens and small business owners over administrative tax-related matters.

In a statement, Premadasa said the public was “not angry about paying taxes” but was frustrated by what he described as unfair treatment under the proposed law.

He alleged that Section 185A of the proposed bill could make delays in filing tax returns or registration-related issues criminal offences, warning that struggling small-scale entrepreneurs could be treated in the same manner as individuals deliberately evading millions of rupees in taxes.

“That is wrong,” the Opposition Leader said.

Premadasa further accused the government of resorting to criminal action against people instead of reforming and modernising the Inland Revenue Department and simplifying tax compliance procedures.

He also questioned the government’s commitment to tackling corruption and financial crimes, asking why stronger measures had not been taken against money laundering, financial fraud and those accused of misappropriating public funds.

“Go after the corrupt. Punish real fraudsters. But do not weaponise the law against the common man,” he said.

Premadasa added that the Opposition would continue to resist legislation that undermined “fairness, proportionality, and the constitutional rights of the people.”

News

Floods, landslides affect 3,475 people

Published

12 hours ago

2026/05/15

Thilina Walpola

Adverse weather conditions prevailing across the country have severely affected 3,475 persons belonging to 1,113 families in seven districts, according to the Disaster Management Centre (DMC).The DMC said 1,310 individuals from 489 families had been relocated to eight temporary safety shelters due to the deteriorating weather situation.

The DMC also confirmed one death from the Koralepatthu South area in the Batticaloa District.

As of 10 am yesterday (14), a total of 88 houses and one business establishment had sustained partial damage as a result of the adverse weather conditions.

Authorities have urged the public in vulnerable areas to remain vigilant and follow safety instructions issued by disaster management and local officials as heavy rains continue to affect several parts of the country.

Meanwhile, the National Building Research Organisation (NBRO) yesterday extended landslide warnings for several districts across the country due to the prevailing adverse weather conditions.

According to the NBRO, Level 2 landslide warnings have been issued for Neluwa in the Galle District; Agalawatte, Baduraliya, Matugama, Horana and Walallawita in the Kalutara District; and Ratnapura and Pelmadulla in the Ratnapura District.

Level 1 landslide warnings remain in effect for several areas in the Badulla, Galle, Kalutara, Kandy, Kegalle, Kurunegala, Matale, Monaragala, Nuwara Eliya and Ratnapura districts.

The warned areas include Bandarawela, Passara and Hali Ela in Badulla; Thawalama, Elpitiya and

Niyagama in Galle; Ingiriya and Bulathsinhala in Kalutara; and multiple Divisional Secretariat areas in the Kandy District, including Poojapitiya, Deltota, Udunuwara and Pathahewaheta.

Warnings have also been issued for Bulathkohupitiya, Mawanella, Kegalle, Aranayake, Yatiyanthota, Warakapola and Rambukkana in the Kegalle District; Ridigama in Kurunegala; Rattota, Naula and Ambanganga Korale in Matale; and Wellawaya, Badalkumbura and Bibile in Monaragala.

In the Nuwara Eliya District, the warning covers Norwood, Ambagamuwa Korale and Kotmale, while Eheliyagoda, Kalawana, Kuruwita, Godakawela, Kiriella and Ayagama in the Ratnapura District have also been placed under alert.

The NBRO said the warnings were extended in view of further rainfall forecast by the Department of Meteorology and urged residents in vulnerable areas to remain vigilant and follow instructions issued by authorities for their safety.

Meanwhile, the water levels in several major river basins that had risen due to recent heavy rainfall are now receding following a decline in rainfall over the past 24 hours, the Department of Irrigation said.

Director of Irrigation (Hydrology and Disaster Management) L.S. Sooriyabandara said water levels in the Nilwala River, Gin Ganga, Kalu Ganga and Attanagalu Oya basins were showing a downward trend as rainfall eased.

He noted that water levels were declining in most areas, with the exception of the Millakanda area in the Kalu Ganga basin.

However, Sooriyabandara warned that the current improvement could be temporary, as the Department of Meteorology has forecast further rain in the coming days.

According to the Department, 18 of the country’s 73 major reservoirs are currently spilling over, while another 18 medium-sized reservoirs are also discharging water.

He stressed that the release of water does not indicate a major flood situation at present, but urged the public to remain vigilant and follow future advisories issued by authorities.

By Norman Paliahwadane and Chaminda Silva