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Harsha says govt. gave haircut to EPF unfairly sparing banks and insurance companies

Published

3 years ago

2023/07/14

The Committee on Public Finance (COPF) had not received the data that the Central Bank and the Ministry of Finance had when it discussed the resolution on domestic debt restructuring, CoPF Chairman and Samagi Jana Balawegaya (SJB) MP Dr. Harsha de Silva said in a television interview on Wednesday.

“We held discussions with officials of the Central Bank, the Ministry of Finance, and other stakeholders for two days based on the data available to us. They told us that domestic debt restructuring must be done,” he said.

Dr. de Silva said that the Central Bank Governor had said that he wasn’t a great fan of domestic debt restructuring. However, the latter said that the country had to restructure its domestic debt because foreign debt holders were insisting on it, the SJB MP said.

“My stance was that we must avoid restructuring domestic debt. However, if the government insists that this must be done, I have suggested ways in which we could do this in the two blueprints I presented in 2022 and 2023,” Dr. de Silva said.

The SJB MP said that the IMF had not told Sri Lanka that it must restructure its domestic debt. The IMF wanted Sri Lanka’s authorities to restore debt sustainability by reducing the level of public debt below 95 percent of GDP by 2032; reducing the average central government gross financing needs (GFNs) in 2027–32, including from the materialiation of contingent liabilities, below 13 percent of GDP; keeping FX debt service of the central government below 4.5 percent of GDP in any year during 2027-32; and to ensure that the fiscal and external financing gaps are closed.

“Why did we have to restructure domestic debt, then? Reducing the level of public debt below 95 percent of GDP by 2032 is not a difficult thing. Reducing the GFNs is tougher. There are two parts to achieving this. First is the fiscal pillar, i.e., reducing the budget deficit. How do we do this? We have to increase tax revenue, and reduce expenses. The extent of debt restructuring depends on our ability to reduce the budget deficit,” he said.

Dr. de Silva said the government has believed that they can’t reduce the budget deficit beyond this point. Thus, they have asked foreign debt holders for a 30 percent haircut, he said.

“Then these debt owners insist that we also restructure domestic debt, since they have to take a haircut. So about 0.5 percent of the GDP worth of domestic debt had to be restructured,” he said.

The problem is that the burden of the entire debt restructuring has fallen on the EPF, while banks and other such institutions have been made exempt. Out of the total debt portfolio, EPF held 42 percent, while banks held 45 percent, he said. About eight percent was held by insurance companies, MP de Silva said.

“There wouldn’t be any problem if the burden was divided in an equitable manner,” he said.

Sri Lanka had to issue treasury bonds at high interest rates in the last few years because everyone knew that a haircut was inevitable.

“An investor would purchase a bond at 28 percent, expecting that he or she would have to take a cut of about eight percent. However, a large number of those who bought bonds at an interest rate of 28 to 30 percent didn’t have to take a haircut at all. But EPF has to take a big cut and get nine percent interest,” he said.

The SJB MP said those who defend the decision to exempt banks and insurance companies from debt restructuring claim that banks already pay a 50 percent tax on their profit and that the exemption would prevent a collapse in banks. However, both claims are false, he said.

“Funds like the EPF are the last to be affected in all other countries that have restructured domestic debt. Those who contribute to the EPF have no say in how their money is invested. If the burden of domestic debt restructuring was divided equally, both banks, EPF, and insurance companies would have had to pay relatively bearable amounts, and it would not have led to a collapse in the banking sector,” he said.

The SJB had proposed to divide restructuring equally and give banks regulatory forbearance, i.e., a regulatory policy that permits banks and financial institutions to continue operating even when their capital is fully depleted, he said. (RK)

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New Chairperson and Members appointed to the Finance Commission

Published

8 hours ago

2026/07/22

Priyan

President Anura Kumara Dissanayake has appointed Ms N. R. Anees as the new Chairperson and a member of the Finance Commission.

J. M. C. J. Wijetunga and K. Karunaharan have been appointed as the other members of the Commission.

The letters of appointment were presented to the appointees by the Secretary to the President, Dr Nandika Sanath Kumanayake, at the Presidential Secretariat ton Monday (20) afternoon

The appointments were made to fill the vacancies createdy following the expiry of the terms of office of the previous members of the Finance Commission.

(PMD)

News

True leadership is not about titles or power, but about acting responsibly for the well-being of others – Prime Minister

Published

10 hours ago

2026/07/22

Priyan

Prime Minister Dr. Harini Amarasuriya stated that true leadership is not about titles or power, but about acting responsibly, with compassion, and working for the well being of the others.

The Prime Minister made these remarks while attending the President’s Guide Award and Prime Minister’s Award Ceremony, organized by the Sri Lanka Girl Guides Association, one of the country’s leading voluntary organizations dedicated to empowering girls and young women. The ceremony was held on Sunday (19th July )at Temple Trees in Colombo.

During the event, the Prime Minister presented medals and certificates to the award recipients.

A total of 350 awards were presented at this year’s ceremony, comprising 338 President’s Guide Awards and 12 Prime Minister’s Awards, in recognition of the recipients’ discipline, resilience, integrity, and commitment to serving others.

Addressing the occasion, Prime Minister Dr. Harini Amarasuriya stated that one of the greatest strengths of the Girl Guides association is its commitment to providing equal opportunities to every child, regardless of their background or abilities. The Prime Minister also emphasized that true leadership is not defined by titles or power, but by acting responsibly, listening with compassion, and working for the well-being of others.

The Prime Minister further noted that while women had limited opportunities in the past, today increasing opportunities are being created for girls and women across all sectors, and young women are making remarkable progress in every field. The Prime Minister further stressed that every girl and young woman deserves equal opportunities to improve themselves, noting that the country needs young women leaders who are ready to step forward to build a better future for Sri Lanka.

The Prime Minister also highlighted that, particularly at a time when Sri Lanka is undertaking significant economic and democratic reforms, achieving sustainable national progress requires not only economic growth but also the development of citizens who uphold strong ethical values and social responsibility. In this regard, she commended the invaluable contribution made by the Sri Lanka Girl Guides Association.

Guided by its motto, “Be Prepared,” the Girl Guiding Movement in Sri Lanka was first established on 21 March 1917 at Kandy High School by Miss Jenny Calverley Green. Today, the movement operates through seven branches; Butterflies, the Little Friends, the Guides, the Rangers, the Youth, the Differently Abled Guides, and the Community Guiding Units, catering to different age groups and abilities. The President’s Guide Award is the highest honour that can be achieved by a Girl Guide and is awarded only to those who successfully complete the required challenges, written and oral examinations, and the BP Challenge. The Prime Minister’s Award is presented as the highest recognition within the Ranger Guide section.

The event was attended by at the President of the Sri Lanka Girl Guides Association Swarnika Pitigala, Chief Commissioner Dr. Kushantha Herath, President’s Guide Commissioner Pushpa Perera, Prime Minister’s Guide Commissioner Aruni Karunaratne, other senior officials of the Sri Lanka Girl Guides Association, President’s Guides and Prime Minister’s Guides, as well as a large number of their parents.

(Prime Minister’s Media Division)

News

Customs asked to resume probe or face legal action

Published

18 hours ago

2026/07/22

Sahan Weerasooriya

Rs. 16 bn BMW revenue fraud:

Public interest litigation activist Nagananda Kodituwakku has said he will initiate appropriate proceedings against Director General of Customs, Wimal S.K. Liyanagama, in terms of the Anti-Corruption Act No 9 of 2023, unless the Customs carries out a revenue fraud inquiry to recover approximately Rs 16 bn in lost government revenue.

General Secretary of Vinivida Foundation, and former Customs officer, Kodituwakku said that though the Department, in response to his request for a meeting to discuss the issue, in writing, assured them that the investigation was underway, they found that the actual situation was not so.

Kodituwakku alleged that the Customs Chief had neglected what he called statutory duties under the Customs Ordinance, by disregarding his request for a meeting.

Kodituwakku said the investigation into the importation of 1,728 brand new BMW vehicles, under the concessionary duty permits issued by the government for the public servants, between 2011 and 2014, had been stalled.

The civil society activist said that investigations had revealed the vehicles hadn’t been imported by the permit holders themselves but others. It also transpired that the value of the imported vehicles, mentioned in the commercial invoices, proforma invoices and the CusDecs, tendered to Customs in the names of the permit holders, were not the actual values for the vehicles in question.

The high-profile case has been handled by the Central Investigation Directorate, at that time headed by Murugesu Thayabaran, a batchmate of Kodituwakku.

The ex-Customs officer said that he had appeared as counsel for Thayabaran in Court of Appeal and was determined to bring the case to a successful conclusion. According to him, the importer, over the years, had been represented by nine President’s Counsel as the case dragged on from the time of P.S.M. Charles, Director General, Customs.

Kodituwakku made available letters he wrote to the Customs and other parties on this issue, to The Island. Pointing out that the Court of Appeal on 7 May, 2024, dismissed the importer’s final appeal regarding the case pertaining to the revenue loss of Rs. 16 bn, Kodituwakku said that although the court had cleared the way for the Customs probe, no action had been taken.

However, the Court of Appeal ruling was given before Liyanagama succeeded Seevali Arukgoda as DG Customs on 6 May, 2026. Liyanagama served as Director General of the Department of Management Services at the Treasury before the new appointment.

Kodituwakku said that he had also brought the Customs case to the attention of the Commission to Investigate Bribery or Corruption (CIABOC).

Emphasising the failure on the part of the Opposition to raise this issue, both in and outside Parliament, Kodituwakku said that since the exposure of the BMW scam, during Mahinda Rajapaksa’s presidency, there had been four presidents, namely Maithripala Sirisena, Gotabaya Rajapaksa, Ranil Wickremesinghe and incumbent Anura Kumara Dissanayake. Unfortunately, successive administrations had allowed the interested parties to drag the case. The lack of interest shown by political parties revealed that they not only protected those responsible but encouraged corrupt practices of allowing third parties to import vehicles in terms of permits issued to legitimate recipients of such permits.

Having campaigned on an anti-corruption platform, during the presidential and parliamentary polls in 2024, the NPP couldn’t, under any circumstances, turn a blind eye to this situation, Kodituwakku said, adding that even the IMF should be concerned of the failure on the part of successive governments to recover the money.

By Shamindra Ferdinando