News
Foreign interest payments up by 13.9 percent
Foreign interest payments, which represent 4.7 percent of Sri Lanka’s total interest payments, have increased by 13.9 percent to Rs. 34.0 billion in the first four months of 2024, compared to the same period of 2023, according to the Mid-year fiscal position report–2024, presented by the Ministry of Finance to Parliament recently. Recurrent expenditure, which accounted for around 90 percent of Sri Lankan government’s total expenditure in the first four months of 2024, declined by 4.4 percent to Rs. 1,419.3 billion from Rs. 1,485.0 billion recorded in the same period of 2023.
This was primarily led by the decline of 11.3 percent in interest expenditure to Rs. 726.1 billion from Rs. 819.0 billion in the same period of 2023, and is attributable to the decline in domestic interest payments by 12.3 percent to Rs. 692.1 billion due to the decline in domestic interest rates and the effects of the completion of Domestic Debt Optimization (DDO), the report said. However, foreign interest payments, which represent 4.7 percent of total interest payments, have increased by 13.9 percent to Rs. 34.0 billion. Non-interest recurrent expenditure increased by 4.1 percent in the first four months of 2024 compared to the same period of 2023 with the increase of expenditure on goods and services by 12.5 percent to Rs. 99.8 billion from Rs. 88.7 billion and the increase of expenditure on subsidies and transfers by 6.4 percent to Rs. 291.5 billion from Rs. 274.0 billion.
Expenditure on salaries and wages declined by 0.5 percent to Rs. 301.8 billion in the first four months of 2024 from Rs. 303.3 billion in the same period of 2023 owing to the effects of limiting new recruitments to essential positions and effective management of cadres. Capital and Net Lending declined by 0.4 percent to Rs. 159.9 billion in the first four months of 2024 from Rs. 160.6 billion in the same period of 2023. This was marked by a decline in transfers to public institutions, provincial councils, and net lending, despite the increase in expenditure for the acquisition of fixed assets by 20.8 percent.
Meanwhile, total Government revenue excluding grants increased by 48.3 percent to Rs. 1,216.0 billion in the first four months of 2024 compared to Rs. 820.1 billion in the same period of 2023 mainly due to the increase in tax revenue by 50.5 percent to Rs. 1,117.8 billion from Rs. 742.6 billion.
The increase in tax revenue was led by the increase in revenue from: 1) VAT by 89.5 percent or 199.7 billion driven by the increase of the VAT rate to 18 percent from 15 percent with effect from January 1, 2024, reduction in the VAT registration threshold from Rs. 80 million per annum to Rs. 60 million per annum with effect from January 1, 2024, removal of the vast majority of VAT exemptions with effect from January 1, 2024 and the increase in imports by 9.5 percent in the first four months of 2024 compared to the same period in 2023;2) Income taxes by 27.3 percent or Rs. 52.3 billion due to the realization of the full impact of the tax policy changes that were made effective on January 1, 2023, but were reflected in increases of revenue from February 2023 onwards, impacts of increased wages both in the public sector and informal private sector (Year-on year increase of the public sector and informal private sector nominal wages rate indices were 10.6 percent and 7.1 percent, respectively in February 2024), positive impact of the increased economic activity and return to economic growth on the corporate and personal income taxes;3) Excise Duty on Petroleum by 165.7 percent or Rs. 46.0 billion driven by the increase in petroleum imports by 14.4 percent in the first four months of 2024 compared to the same period in 2023 and the net increase in Excise Duty rates with the increase of rates for petrol and diesel by Rs. 25 per litre on June 1, 2023 and the decrease of rates for Diesel by Rs. 6 per litre and for Petrol by Rs. 5 per litre on January 1, 2024;4) SCL by 107.4 percent or Rs. 16.0 billion driven by the rate increases for sugar and potato to Rs. 50 per kg and the increase in the volume of imports in major commodity items;5) CID by 68.5 percent or Rs. 13.9 billion due to the increase in CID rates from 0:10:15 percent to 0:15:20 percent effective from March 28, 2023, and the increase in imports;6) SSCL by 19.3 percent or Rs. 13.5 billion due to the increase in the number of taxpayers with the lowering of the registration threshold from Rs. 120 million per annum to Rs. 60 million per annum with effect from January 1, 2024 and the impact of the increase in imports;7) Excise Duty on liquor by 20.6 percent or Rs. 12.0 billion due to the realization of the full impact of excise duty rate revisions on liquor implemented with effect from July 1, 2023, the indexation of Excise Duty to inflation and increase of excise duty rates by 14 percent on January 1, 2024, and the revision of annual excise license fees with effect from January 12, 2024; and8) CESS by 64.3 percent or Rs. 10.7 billion due to the increase in imports.
The increase of non-tax revenue by 26.8 percent or Rs. 20.8 billion in the first four months of 2024 also contributed to the increase in revenue. This was led by the increase in revenue from interest by Rs. 11.5 billion, fines, fees, and charges by 8.6 billion and profits and dividends by 3.7 billion. (SI)
News
Sri Lanka says it denied US request to land two aircraft at Mattala airport
Sri Lanka’s president says his government turned down a request from the United States to land two US combat aircraft at a civilian airport earlier this month.
President Anura Kumara Dissanayake told Sri Lanka’s parliament on Friday that Washington had requested permission for the aircraft to land at Mattala Rajapaksa International Airport in southern Sri Lanka from March 4 to 8.
The request was made on February 26, two days before the US and Israel launched their military offensive against Iran.
“They wanted to bring two warplanes armed with eight antiship missiles from a base in Djibouti”, Dissanayake told lawmakers. “We turned down the request to maintain Sri Lanka’s neutrality”, he added to applause.
The US-Israeli war on Iran has sparked widespread concern globally, as Iranian missile and drone attacks across the wider Middle East have sent energy prices soaring and fuelled fears of a widening conflict.
US President Donald Trump has also been pressuring Washington’s allies to show more support for the war, slamming NATO countries as “cowards” for refusing to help secure the Strait of Hormuz.
Iran has essentially shuttered the critical Gulf waterway amid the war, forcing leaders around the world to scramble to try to offset the effects on their economies and energy supplies.
Amid the turmoil, many countries have refused to get directly involved in the war while calling for urgent de-escalation.
On Friday, Switzerland announced that it would halt any weapons exports to the US that could be used in military operations against Iran, citing its longstanding policy of neutrality.
“The export of war materiel to countries involved in the international armed conflict with Iran cannot be authorised for the duration of the conflict”, the Swiss government said.
Sri Lanka’s president also cited his country’s neutrality in the decision to deny the US request to land the two aircraft at Matalla airport earlier this month.
Dissanayake said he had received another request that same day, on February 26, from Iran to seek permission for three naval vessels to make a goodwill visit to Sri Lanka.
“With two requests before us, the decision was clear,” he said, noting that the government denied both to avoid taking sides as signs of escalating conflict emerged.
“Had we said ‘yes’ to Iran, we would have had to say ‘yes’ to the US, as well”, Dissanayake added.
In early March, Sri Lanka’s navy rescued 32 Iranian crew off IRIS Dena after it was torpedoed by a US submarine off the country’s coast, killing at least 84 people.
Days later, Sri Lanka evacuated more than 200 crew members from a second Iranian vessel, IRIS Bushehr, after the ship requested assistance from Colombo.
[Aljazeera]
News
President maintains Lanka has been even-handed in dealing with Iran and US
Sri Lanka refused the request by three Iranian ships to come to Sri Lanka on a goodwill visit and the request by the United States to land two of its fighter jets in Mattala, President Anura Kumara Dissanayake told Parliament yesterday.
“Sri Lanka maintained neutrality by refusing the two requests by both the US and Iran,” he said.
President Dissanayake provided a clarification on domestic fuel prices in light of rising crude oil prices in the global market and subsequent fuel price increases in other countries, triggered by the ongoing crisis in the Middle East.
The President highlighted that the Ceylon Petroleum Corporation (CPC) currently supplies 57% of the country’s fuel requirements, while the remaining 43% is supplied by the private sector.
He further noted that private sector suppliers have requested pricing that reflects current global market rates for the fuel they import.
Accordingly, the President emphasised that a decisive decision on fuel price adjustments must be reached as expeditiously as possible to ensure the continuity of the national fuel supply.
Addressing the Parliament, the President stated that the current pricing formula dictates that for every one-dollar increase in global oil prices, domestic fuel prices must rise by Rs. 2.
He noted that the primary impact being faced is driven by the surge in global fuel prices rather than the depreciation of the rupee against the US dollar.
The President said that, globally, countries have been compelled to make difficult decisions regarding fuel costs, with price increases ranging from approximately 6% to 50%.
He added that while global prices have risen by as much as 49%, the domestic increase has been limited to 8%.
He further stated that Sri Lanka is currently facing a significant challenge in maintaining fuel supply.
The Ceylon Petroleum Corporation (CPC) accounts for 57% of the country’s fuel supply. He noted that had the CPC been the sole supplier, fluctuations could have been managed by offsetting current losses with future profits.
However, he said the private sector now controls 43% of the market, and their position is that if retail prices do not reflect the current landed cost of fuel, they will cease imports.
He added that, from a business perspective, this is a valid concern, as private companies reportedly incur a loss of approximately USD 55 million per shipment, which he said is unsustainable.
The President emphasised that the contribution of the private sector is essential to maintaining the national fuel supply, but noted that they will only participate if they are able to sell at cost-reflective prices.
He stressed that the issue of fuel pricing must, therefore, be addressed urgently.
He also pointed out that under the existing Act, companies are permitted to increase prices; however, the maximum retail price is determined by the Ceylon Petroleum Corporation.
“Although we have entered into agreements with these private companies, the necessary legislative amendments to the Act have not yet been finalised,” he noted.
Regarding government revenue, the President stated that tax income from fuel currently stands at Rs. 20 billion, compared to Rs. 240 billion generated last year from taxes on diesel.
Latest News
Heat Index likely to increase up to ‘Caution level’ at some places in the Western, Sabaragamuwa, North-central, Southern and North-western provinces and in Monaragala, Mannar, Vavuniya and Mullaitivu districts
Warm Weather Advisory Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 3.30 p.m. on 20 March 2026, valid for 21 March 2026
The public are warned that the Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in the Western, Sabaragamuwa, North-central, Southern and North-western provinces and in Monaragala, Mannar, Vavuniya and Mullaitivu districts.
The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.
ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.
Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491
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