Business
New tax bill: Sri Lanka’s corporates wary about ‘subtle’ non-deductions
Say draconian powers drafted to be given to Inland Revenue Chief
Calls for independent body to get a fair hearing
By Sanath Nanayakkare
The new tax bill is one that demotivates taxpayers from being compliant and one that restricts existing taxpayers from their legitimate deductions, Nisreen Rehmanjee, head of corporate finance, group tax and social entrepreneurship project, John Keells Group said on Tuesday.
She said so at a webinar hosted by the Ceylon Chamber of Commerce (CCC) titled,” Implications of Amendments to the Inland Revenue Act.”
Predominantly taking a corporate view of the bill, she said,” Considering the financial situation of the country, I think that everyone has to pay more tax. That is a policy issue and I don’t have any problems with that. But we are concerned about proposed provisions on deductions, tax administration and taxpayer rights. The bill is attempting to collect taxes from those who are already paying and deny legitimate deductions that are incurred in the production of income. For example, in terms of new provisions, interest is considered to be a revenue expense and it is not a capital expense because it is basically what you pay for use of money for a year; and so it’s revenue. When it comes to capital assets it bears a condition that it has to be in use. I think that they have actually restricted this because interest is not a capital expense; it is not something you need to capitalize on because the new law recognises it as a revenue expense under section 12 and allows you a deduction. So I think it is a more restrictive deduction than an enabling provision.”
Further speaking she said,” There is a lot of significant uncertainty right now as to how exchange rate gains and losses are taxed. If one had losses why not allow those losses against gains and allow taxes to be paid on a net amount considering the very high rate of tax? The corporates are very concerned about such subtle non-deductions.”
“You should put your effort into actually broad-basing the tax net, but you are going after the people who are paying taxes. Shouldn’t that time and effort be actually spent on looking at people who are not paying taxes and who don’t have files?”
“Going to the Inland revenue Department and getting an estimate is a very judgmental call now. If you are saying that my profits this year are going to be lesser than last year, and therefore, I am estimating lower. If the assessor disputes that and the taxpayer has to go to the Tax Appeals Commission, it is an additional burden on a compliant taxpayer. We are getting crazy kind of assessments which are not defendable. IRD has a period of 30 months to make an assessment, but the tax payer is given only 14 days to analyse it, do the legal consulting and draft the appeal and submit it. That is very unfair. If the process is to be tightened then let’s reduce the time given to IRD to dispute the tax return to 18 months and make it more efficient. I think taxpayers need an independent body where they can go to and get a fair hearing before they go to the Tax Appeals Commission,” she said.
Sulaiman Nisthar, partner-tax, Ernst & Young said that agro farming, agro- processing and agro manufacturing would continue to enjoy tax concessions, but the definitions of these wordings need to be carefully evaluated.
Suresh Perera, principal of the tax and regulatory division of KPMG Sri Lanka said,” A particular provision of the bill gives draconian powers to the Commissioner General of IRD to come up with an estimate and there is no provision for it to be challenged. You have to pay taxes according to that estimate and if you don’t pay, then it is considered non-compliance. You don’t have a holdover relief position. In such a situation, you get only an extension period of six months to pay that amount. This is going to be a methodology for Commissioner General to collect taxes; just make any estimate that he wants which can’t be challenged. This is something that you need to act now and not later on because once this becomes law under article 88(3) of the Constitution, it will be too late to do anything about it.”
Duminda Hulangamuwa, senior partner and head of tax, Ernst Young & Sri Lanka said, “We made representations to the President, the Governor of the Central Bank and the Treasury Secretary on behalf of middle income individuals who are liable to pay high taxes when the new bill becomes law, but the message we got from them was they also didn’t like to increase taxes, but they were left with no other choice given the current economic realities and discussions with the IMF.”
Business
Ceylon Chamber urges govt to convert fiscal gains into productive investment
The Ceylon Chamber of Commerce has acknowledged the government’s recent fiscal gains but is urging a strategic shift of these surpluses into productive public investment to secure long-term growth.
In its review of the National Budget 2026, the Chamber endorsed the government’s “clear trajectory” of fiscal consolidation and disciplined debt management, noting this consistency is crucial for Sri Lanka’s ongoing economic recovery.
However, with the initial post-crisis consumption boom now moderating, the Chamber stressed that the government must pivot from consolidation to investment. It identified targeted capital expenditure in infrastructure, energy, tourism, and digital services as the potential new engines needed to drive the economy forward.
Significantly, the Chamber revealed that 18 of its policy proposals were incorporated into the budget, which include:
Trade: Developing a Trade National Single Window and a new Tariff Policy to phase out para-tariffs.
Investment: Implementing a Public-Private Partnership (PPP) framework, a digital single window for approvals, and a new residence visa scheme for investors.
Digital Economy: Plans to issue the first Digital ID in 2026, roll out 5G licensing, and eliminate service fees for online government payments.
Land & Tourism: Advancing a National Land Use Plan and resuming the Bandaranaike International Airport (BIA) expansion project.
Despite these welcomed inclusions, the Chamber highlighted three critical areas requiring greater focus:
Bridging the Implementation Gap: The Chamber warned that execution with clear timelines is the ultimate test, emphasizing that promises on the Trade Single Window and PPP laws must be delivered on time.
Strengthening Tax Administration: Improving compliance and widening the tax net through better enforcement was deemed more critical than further rate increases.
Improving Public Sector Efficiency: The Chamber argued that the reform agenda is at risk without “substantial improvements” in institutional capacity and inter-agency coordination.
The Chamber also noted a missed opportunity, stating the budget lacked a “targeted investment incentive package” essential for attracting the large-scale, export-oriented investments needed to achieve the government’s 7% growth target.
Furthermore, the Chamber called for clarity on the proposed Economic Transformation Act and urged the government to fast-track legislation for State-Owned Enterprise (SOE) and PPP reforms.
Concluding its comments on the Budget, the Chamber reaffirmed its commitment to collaborate with the government, underscoring that “sustained delivery” on these reforms is the only way to convert current economic stability into durable, broad-based growth.
By Sanath Nanayakkare ✍️
Business
DIMO Healthcare partners with RAB to strengthen Radiology Education in Sri Lanka
In a landmark initiative aimed at empowering Sri Lanka’s healthcare professionals with advanced radiology knowledge, DIMO Healthcare, the healthcare arm of DIMO, recently collaborated with the non-governmental organization Radiology Across Borders (RAB) to host a series of educational sessions on RAB VITAL Ultrasound Scanning. This marks the first time such specialized RAB-led training sessions have been conducted in Sri Lanka.
The programme, which attracted over 80 local medical professionals, took place across four leading medical institutions — the Army Hospital, Hemas Hospital (Wattala), Durdans Hospital, and Lanka Hospitals. The sessions covered a range of vital topics including gynecological and obstetric basic scanning techniques, FAST scans in ICU or point-of-care environments, and deep vein thrombosis scanning.
Speaking on the initiative, Priyantha Dissanayake, Chief Operating Officer of DIMO Healthcare, said:”As a pioneer in the local radiology sphere and the approved partner of Siemens Healthineers, we believe it is our responsibility to bridge the knowledge gap between global medical advancements and local practice. By facilitating such training programmes, we aim to uplift healthcare standards across Sri Lanka and empower our medical professionals with the tools and expertise needed to ensure earlier disease detection and better patient care.”
Business
Levi & Dili: Styling Sri Lanka’s new generation of fearless women
In a fashion landscape often crowded with ‘me too’ products, a new Sri Lankan label is making a statement that is as much about identity as it is about aesthetics. Levi & Dili, the creation of Founder and CEO Ganga Wijayawardane, is emerging as a powerful platform for the modern woman, championing a philosophy where style meets substance.
With a formidable background in International Marketing, Wijayawardane is now channeling her corporate expertise into her lifelong passion for design. The result is a fashion line with an international-contemporary feel, characterised by clean silhouettes, unusual fabric combinations, and curated, hand-picked accessories. But what truly sets Levi & Dili apart is its soul.
“The Levi & Dili woman stands for all women who long to be more, do more, to move beyond traditional roles,” Wijayawardane states. The brand’s designs are intentionally bold and eye-catching, crafted to reflect the multifaceted personality of its wearer. She is envisioned as an entrepreneur, a boss lady, a creative force, a resilient mother – a real woman who is “fearless, focused, and free.” This triad is not just a tagline but the brand’s core design brief, reflected in visuals that showcase capability and agency.
This ambition is matched by a steadfast commitment to quality. The label adheres to rigorous standards through small, controlled production batches, vetting suppliers, and conducting thorough fabric and wear tests. This promise of “affordable luxury” is a key pillar, offering fewer, better pieces with durable materials and considered details that flatter multiple body types. “We spend where it matters – fit, finishing and materials – and edit out anything that adds cost without value,” she explains.
Customer experience remains deeply personal, a non-negotiable for the brand. Online, real stylists are available for consultations, ensuring a high-touch service that continues post-purchase. While currently operating through e-commerce and pop-ups across Colombo, strategic plans are underway for a dedicated design studio, a stepping stone to a future flagship store.
Looking ahead, Wijayawardane’s vision is expansive. Within five years, she sees Levi & Dili as a leading Fashion House, setting the tone for Sri Lankan fashion and moving internationally. The goal is to be a Maison renowned not just for its designs and quality finishes, but for its key message: empowering a new generation of financially independent women who live fully and contribute significantly to the economy.
Levi & Dili is more than clothing; it is a wearable testament to the ambitious, modern Sri Lankan woman.
For new customers: Shop online and at announced pop-ups. For styling help, contact the team at support@leviandili.com or 077 555 2941.
By Sanath Nanayakkare ✍️
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