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FSP urges NPP MPs to reject unfair tax policies

Published

1 year ago

2025/03/7

Pubudu Jagoda

The Frontline Socialist Party (FSP) has sent a letter to all MPs of the ruling National People’s Power (NPP) government, urging them to reject what it describes as a severely unfair tax policy outlined in the 2025 Budget. The party has warned that the proposed tax structure will place an unbearable burden on the public, while at the same time granting significant concessions to large corporations and wealthy individuals.

The 2025 Budget, which was presented to Parliament on 17 February, is scheduled for a final decision on 21 March. The FSP stated that tax policies were generally designed to reduce economic inequalities, prioritise economic development, and regulate market consumption patterns. It argued that the 2025 Budget approached taxation solely as a means of generating government revenue, disregarding the economic hardships faced by the majority of the population.

The FSP has raised concerns over the significant increase in Value Added Tax (VAT) on goods and services, which is set to rise by 25.94% in 2025. The government aims to increase tax revenue from Rs. 2,201 billion in 2024 to Rs. 2,772 billion in 2025, resulting in a notable rise in the financial burden on ordinary citizens. According to the FSP’s analysis, this means that in 2024, an average Sri Lankan household paid Rs. 31,623 per month in indirect taxes on goods and services. In 2025, this figure is expected to increase to Rs. 39,817 per month, placing an additional Rs. 4,200 in taxes on each household. The party argued that this increase is unbearable for families already struggling under the weight of the economic crisis.

Citing data from the Department of Census and Statistics, the FSP has highlighted that the average monthly household income in Sri Lanka is Rs. 76,414, while monthly expenses amount to Rs. 63,130. It has warned that nearly two-thirds of a family’s monthly spending would now be consumed by taxes, describing this as a severe economic blow to working-class and lower-income groups. The party accused the government of betraying the expectations of the people who placed their trust in the NPP administration.

While the government has defended its decision by claiming that the higher VAT collection is not the result of introducing new taxes, but rather improving tax enforcement, the FSP dismissed this argument as misleading. It pointed to the Ministry of Finance’s own report, which stated that between 2023 and 2024, businesses collected Rs. 333.1 billion in taxes from consumers but failed to remit them to the state. Despite this massive tax evasion by corporations, the 2025 Budget does not prioritise recovering these unpaid revenues or strengthening direct taxation on high-income earners. Instead, the government has doubled the withholding tax on savings from 5% to 10%, imposed a 15% tax on foreign income earned through online services, and extended import duties on 63 essential goods, including food items, from 1 January 2025.

The FSP also criticised the government’s handling of VAT rates, which have been rising continuously since 2022. The VAT rate, which was 8% in early 2022, was increased to 12% in August 2022, then raised to 15% in January 2023, and further increased to 18% in January 2024. The party warned that the government appears to be following a pattern of gradually increasing VAT, making it even more difficult for ordinary people to afford basic goods and services. Additionally, a Social Security Contribution Tax was introduced in 2023, further exacerbating financial pressures on the public.

Beyond the tax hikes on ordinary citizens, the FSP condemned the favourable treatment given to wealthy individuals and large corporations. It cited a Parliamentary Committee on Public Accounts (COPA) report from March 2024, which revealed that large corporations evaded Rs. 1,068 billion in taxes, while domestic and foreign corporate entities received tax concessions worth Rs. 978 billion. Despite these staggering figures, the government has only planned to increase direct tax revenue by Rs. 141 billion, indicating that it has no real intention of recovering unpaid taxes from the country’s largest businesses.

The FSP also highlighted a controversial clause in the 2025 Budget that offers a six-month amnesty period for overdue tax payments. This clause, buried in the technical section (Clause 1.9) of the budget document—which was only released in English—states that businesses that failed to pay taxes between 2022 and 2023 can settle their dues without facing penalties or interest charges. The party described this as a shameful giveaway to tax-evading corporations, arguing that it directly undermines the government’s claims of enforcing tax compliance.

In its letter to MPs, the FSP urged lawmakers to reject the tax policy and stand against what it called a blatant betrayal of the public interest. The party reminded Parliamentarians that Sri Lanka’s economic crisis, IMF-imposed financial restructuring, and rising inflation have already pushed millions into financial hardship, and that imposing additional tax burdens on struggling families would only deepen the crisis.

The FSP warned that if MPs vote to approve these unfair tax measures, they risk facing public outrage and a loss of trust. It called for an immediate revision of the 2025 Budget’s tax policy, urging the government to shift the tax burden away from ordinary citizens and onto the country’s wealthiest individuals and corporations.

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Electricity tariffs to be increased from 1st April

Published

7 hours ago

2026/03/30

Priyan

The Public Utilities Commission of Sri Lanka (PUCSL) has granted approval to increase electricity tariffs with effect from 1st April .

The Ceylon Electricity Board (CEB) requested a 13.56% electricity tariff revision for the second quarter of this year.

The revision announced by the PUCSL for domestic consumers:

0–30 units category, electricity tariffs will rise by 4.3%,

31–60 units category, tariffs will rise by 6.9%,

61–90 units category, tariffs will rise by 6.9%,

91–120 units category, tariffs will rise by 7.2%,

Above 180 units, electricity tariffs will rise by 25.3%

The PUCSL has decided not to increase electricity tariffs for religious and charitable institutions that consume below 180 units monthly and a 9.6% increase for institutions that consume above 180 units.

Ectricity tariffs for the general and household consumer categories has been increased by 8%, while the electricity tariff increase for the industrial sector is 8.7%, the increase in tariff for government institutions is 14.4%.

News

A QR code system to be introduced for agricultural lands and other sectors requiring fuel

Published

16 hours ago

2026/03/30

Priyan

It was decided at the committee appointed to oversee the distribution of essential goods to appoint five officials from the Ceylon Petroleum Corporation to cover all ministries in order to examine fuel-related issues and undertake the necessary interventions.

It was further discussed that the responsibility of these officials would be to examine fuel-related issues arising in institutions under each ministry and to intervene in providing solutions by maintaining coordination with the Corporation.

These matters were discussed at a meeting of the committee appointed to oversee the distribution of essential goods, chaired by Minister of Transport, Highways and Urban Development Bimal Rathnayake held on Friday (27) at the Presidential Secretariat.

It was also noted, with particular attention, that requests have been made by industrialists indicating that the current fuel quota allocated to vehicles for the distribution of their products across the country is insufficient. It was further discussed that, if these concerns are not addressed, there is a likelihood of an increase in the prices of goods, which could in turn cause significant hardship to the public during the festive season.

The committee also discussed the issuance of fuel for the distribution of essential food items by state and private institutions, including supermarkets such as Sathosa, wholesale importers, tourism-related service providers, hotels and other service-providing organisations.

Accordingly, it was discussed that requests for fuel quotas submitted by these institutions should be carefully considered and prompt action taken as necessary and that such requests should be forwarded to the Ministry of Energy through the relevant ministries.

Attention was also drawn to the need for the swift implementation of a QR code system for the issuance of fuel to other sectors, including agriculture and the fisheries industry, based on letters issued on the recommendations of the relevant government officials, including agricultural research officers, instead of the previous method of direct fuel allocation.

Minister Bimal Rathnayake emphasised the need to ensure a continuous and properly managed fuel supply, with particular focus on providing goods to the public without shortages and preventing excessive price increases during the forthcoming Sinhala and Hindu New Year season.

The discussion was attended by a group of government officials, including Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe, Deputy Minister of Power Arkam Ilyas, Senior Additional Secretary to the President, Kapila Janaka Bandara and Chairman of the Ceylon Petroleum Corporation, D. J. Rajakaruna.

News

Inquiry into female employee’s complaint: Retired HC Judge’s recommendations ignored

Published

19 hours ago

2026/03/30

Thilina Walpola

Speaker Wickramaratne receiving the report from retired HC Judge Alahapperuma. Secretary General of Parliament Rohanadeera stands next to the Speaker (file photo)

Parliament:

… sexual harassment claims dismissed

Recommendations made by retired High Court Judge Ms. Sujatha Alahapperuma, following an inquiry into claims by a female employee of the Department of Information Systems and Management of Parliament, regarding sexual harassment, denial of due salary increments and other forms of harassment, were yet to be implemented, sources familiar with the investigation said.

The retired HC Judge handed over the report to Speaker Dr. Jagath Wickramaratne on 24 November, 2025. Secretary General of Parliament Kushani Rohanadeera was also present on that occasion.

The retired judge has recommended that administrative decisions be taken expeditiously to grant her salary increments due for 2024 and 2025, reevaluation of all employees attached to the Department of Information Systems and Management and keep them under close scrutiny and strengthening of the ‘Helpdesk’ to meet the requirements.

Sources said that none of the recommendations have been implemented and the concerned employee in spite of still being the Senior Helpdesk coordinator remained attached to the Supplies and Services Office. She had been ordered to report to the Supplies and Services Office in January 2025 following a continuing dispute with the top management of the Department of Information Systems and Management.

Parliamentary Staff Advisory Committee on 25.07.2025 decided to conduct an external investigation into the issue after the employee refused to accept the outcome of the internal inquiry conducted in the wake of SJB lawmaker Mujibur Rahman raising the issue in Parliament.

The retired judge has emphasised the urgent need to take tangible measures to address administrative issues with a view to enhance discipline and human resources management among other issues.

However, the retired judge has declared that the complainant or any other female employee attached to the of Department of Information Systems and Management hadn’t been subjected to any form of sexual harassment as alleged.

The retired judge further asserted that the complainant had been prejudicially treated by two interview boards when she appeared before them seeking posts of Database Administrator and Parliament Officer.

The retired judge has also asserted that the Supplies and Services Office where the complaint continued to serve even now was not suitable and not in line with her qualifications. Some of those who had appeared before the retired judge during the inquiry claimed that was a temporary transfer. However, the report dismissed that claim declaring that transfer appeared to have been done outside acceptable procedure and her increments stopped without giving any justifiable reason.

The retired judge has stated that for want of proper procedures and systems, the administration seems to be in turmoil.

By Shamindra Ferdinando