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Planters’ Association commends postponement of SVAT abolition, urges further reevaluation

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The Planters’ Association of Ceylon (PA) has commended the Government of Sri Lanka for its decision to postpone the abolition of the Simplified Value Added Tax (SVAT) system to April 1, 2025. This decision, initially planned for January 1, 2024, followed strong opposition from a broad coalition of exporters and business chambers.

While the postponement provides some relief, the PA called on the Government to further ensure that the SVAT system would be retained until a proper and effective alternative can be implemented in consultation with all stakeholders.

“Such a system must ensure the Government does not face challenges with revenue while also protecting the cash flows of Sri Lankan exporters, who are already facing significant challenges in an increasingly volatile global economic environment,” Planters’ Association of Ceylon, Secretary General, Lalith Obeyesekere stated.

The SVAT system, which has been a critical support mechanism for the industry since its implementation in 2011, remains vital for the survival of both Regional Plantation Companies (RPCs) and smallholder tea farmers.

Stakeholders remain deeply concerned that the eventual removal of SVAT without a robust replacement could lead to significant income losses for all exporters – particularly tea and rubber smallholders – and disrupt the entire tea value chain. Historically, the Sri Lankan tea industry saw robust growth until 2014, with exports surpassing 300 million kg and generating earnings of approximately US$1.5 billion.

“In 2018, the Government at that time set an optimistic target of doubling national tea production by 2025. But this trajectory shifted dramatically following the ban on Glyphosate in 2015, and a complete ban on fertilizer and agrochemicals in 2021.

“Both decisions severely impacted crop yields. By 2023, tea production had plummeted to around 223 million kilos, with export earnings dropping to about US$1.3 billion. Approximately 480,000 smallholders in Sri Lanka depend on tea for their livelihoods,” The PA stated.

Smallholders receive approximately 68% of the total price that the tea fetches at the auction for their green leaf. However, with average earnings around Rs. 23,000 per month for those cultivating an average of 0.5 acres, the financial strain is palpable. The anticipated loss due to the eventual removal of SVAT could amount to an estimated Rs. 24 billion annually for smallholders alone, representing 18% directly borne by smallholder families.

The SVAT system’s role is particularly crucial as over 90% of Sri Lanka’s tea is exported. The industry is already grappling with cash flow issues exacerbated by delayed VAT refunds, which can get significantly delayed, taking up to six or seven years in some instances. As RPCs receive less revenue from auctions with tea exporters paying an 18% VAT on exports since January 1, 2024, the overall production levels are expected to decline further. For instance, with 1 kilogram of tea priced at Rs. 1,200, the 18% VAT amounts to LKR 216, totaling up to Rs. 1,416. Exporters are required to pay this VAT upfront, impacting their cash flow significantly.

Delays in VAT refunds ties up capital that could otherwise be invested in production and operations. The cumulative financial loss for the industry in 2023 has already reached an alarming average of LKR 5 billion per month, totaling around LKR 60 billion per year due to VAT complications. The imposition of VAT increases operational costs for RPCs and smallholders alike, leading to reduced profitability and potentially lower production levels over the next five years.

To ensure the long-term stability and growth of Sri Lanka’s tea industry, the PA emphasized the need for a strategic approach. Government intervention is critical, with policies that enhance access to fertilizer and essential agricultural inputs, thereby reducing production costs and boosting productivity. Additionally, streamlining VAT refund processes is imperative to ease financial pressures on exporters, enabling timely reimbursements and improving cash flow. Collectively, these measures aim to strengthen the industry’s competitiveness, drive sustainable growth, and place it back on a robust growth trajectory.

In 2014, Kenya’s tea production reached approximately 415 million kilos, and by 2023, this figure had risen to around 550 million kilos, showcasing significant growth in the country’s tea sector. In contrast, Sri Lanka has experienced a decline in tea production, which has also raised concerns among stakeholders.



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Indra Traders launches Athwela Programme in partnership with Bank of Ceylon

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Rushanka Silva (Managing Director, Indra Traders) and Y. A. Jayathilaka (General Manager, Bank of Ceylon) appearing for a photograph after signing the agreement. Also present at the occasion (from left in the photo): Asitha Perera – Senior Sales Manager, Indra Traders, Dharma Ilangasinghe – Group General Manager, Indra Traders, Shashindra Silva – Sales Director, Indra Traders, R. M. N. Jeewantha – Deputy General Manager (Development Banking & Branch Credit Operations Range II), BOC, Samantha Wimalasiri – Assistant General Manager (Consumer & Development Banking), BOC, F. S. Naeem – Chief Manager (Development Banking), BOC, R. M. L. W. Ratnayake – Senior Manager (Consumer & Development Banking), BOC

Indra Traders recently introduced a special programme titled “Athwela” in collaboration with the Bank of Ceylon (BOC).

The programme was designed with a primary focus on customer convenience, aiming to provide essential support by simplifying the financial challenges often associated with vehicle purchasing and servicing. This initiative is regarded as a further strengthening of the trust and relationships Indra Traders has built over its decades of service excellence.

The partner for this program, the Bank of Ceylon (BOC), is Sri Lanka’s largest state bank and a premier financial institution. It offers an extensive island-wide branch network, exceptional customer service, and some of the most competitive interest rates in the market.

Speaking at the event, Rushanka Silva, Managing Director of Indra Traders, said: “Today is a very special day for us. As Indra Traders, a company engaged in business for over five decades, it is a great honor to enter into the ‘Athwela’ agreement with Sri Lanka’s largest bank. Through this program, we are working to provide various financial and service facilities, including leasing. As a company that imports everything from the smallest to the largest vehicles, we provide customers the opportunity to purchase any vehicle they need through our six yards located across the island. Even if a specific vehicle is not in our current stock, we are prepared to import it according to the customer’s requirement. I invite all customers to join hands with ‘Athwela’.”

Y. A. Jayathilaka, General Manager of Bank of Ceylon, added “At a time when restrictions on vehicle imports have been relaxed, it is a great pleasure for Bank of Ceylon, the strongest bank in the country, to partner with Indra Traders – a company with over 50 years of trusted history. Our goal is to provide a comprehensive and convenient service to leasing customers across the island by combining BOC’s extensive branch network with Indra Traders’ expertise.”

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Launch of new Beijing-Colombo air link announced in China

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Ambassador Majintha Jayasinghe and representatives of Beijing Capital Alliance at the destination promotion event where the new Beijing-Colombo air link was announced.

The Sri Lankan Embassy in Beijing together with Beijing Capital Airlines last week organized a destination promotion event and announced the launch the Capital Airlines direct flights from Beijing to Colombo.

While congratulating Beijing Capital Airlines for expanding the connectivity between Beijing and Colombo, the Sri Lanka Ambassador Majintha Jayesinghe highlighted the longstanding bilateral relations between the two countries and the significance of strengthening connectivity in line with the Joint Statement issued following the meeting in January 2025 between President Xi Jinping and President Anura Kumara Disanayaka, a news release from the embassy said.

The President of the Beijing Capital Airlines Liu Jun expressed appreciation and stated that the new route is an important milestone in expanding the airline’s South Asian network while strengthening the Air Silk Route. He also highlighted that this is the only direct flight connecting Northern China with Sri Lanka and a key Capital-to-Capital air link, it added.

There was no word about the flight frequency and when the service will begin.

Ambassador Jayesinghe reiterated that Sri Lanka is more than a holiday destination and is positioned as an exotic, experienced-rich, year-round travel destination offering warm and pleasant weather. He emphasized that Sri Lanka, as a stand-alone destination, provides a blend of rich history, eight UNESCO heritage sites, diverse landscapes, pristine beaches, dense forests, and scenic mountains, inviting Chinese travellers to explore and enjoy Sri Lanka.

The commencement of the Beijing – Colombo route will contribute to the social and economic development of both countries. The Beijing- Colombo service has filled a longstanding gap in the aviation market and will further promote the economic, trade, cultural and tourism development, while offering more convenient travel options, the news release said.

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SLT-MOBITEL and Fintelex empower farmers with the launch of Yaya Agro App

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From left to right – Supipi Nawarathne, Head, Department of Food Technology, UCIARS, Dr. Nisansala Widanapathirana, Head, Department of Agro Technology, UCIARS, Professor Champathi Gunathilake, Director, UCIARS, Dr. Nath Dharmasena, CEO, Fintelex Pvt Ltd, Sudharshana Geeganage, COO, Mobitel, Professor Indika Mahesh Karunathilaka, Vice Chancellor, University of Colombo, Pradeep Arunasiri, Consultant Agronomist – Digital Inclusion, Fintelex Pvt Ltd, and Madura Hewage, Senior Manager – VAS, Mobitel, at the launch of Yaya Agro.

SLT-MOBITEL Mobile, in collaboration with Fintelex (Pvt) Ltd, has launched ‘Yaya Agro’, an exclusive all-in-one smart agriculture app designed to empower Sri Lankan farmers with the tools they need to grow smarter, safer, and more sustainably.

Yaya Agro represents a new era of digital farming in Sri Lanka combining technology, expert knowledge, and community empowerment to provide farmers the confidence to make smarter decisions, improve productivity, and build a sustainable future.

Developed with support from GIZ and Hatch and validated by leading academic and professional institutions including the University of Colombo, Institute for Agrotechnology and Rural Sciences, and the Sri Lanka Red Cross Society, Yaya Agro combines agricultural expertise, real-time weather updates, first aid support, and AI-powered assistance into a single, easy-to-use platform.

The launch of Yaya Agro positions SLT-MOBITEL as an innovative, inclusive, and collaborative technology leader. Partnering technology and academic institutions, the company extends its role outside the sector into agriculture, empowering farmers with AI-driven tools, multilingual access, and market connectivity. The initiative also strengthens SLT-MOBITEL’s image as a champion of digital empowerment and sustainable development in Sri Lanka.

Functioning as a comprehensive digital companion, Yaya Agro is positioned as a digital farming companion, bringing precision agriculture, real-time support, and market access to the fingertips of every Sri Lankan farmer.

Whether managing a small home garden or a large commercial farm, the app equips farmers with vital insights to improve crop yield, reduce risks, and connect directly with buyers through the integrated online marketplace.

Yaya Agro offers farmers daily crop information with expert tips on management, pest control, and best practices, all validated by the University of Colombo. It provides accurate, location-based weather forecasts to help plan farming activities more effectively. The app also delivers life-saving first aid tutorials and safety information verified by the Sri Lanka Red Cross Society, ensuring farmers are prepared for emergencies. With the AI chatbot assistant, farmers can access instant, personalized advice around the clock, with smart notifications delivering timely alerts and reminders tailored to crop cycles.

To make learning inclusive and accessible, Yaya Agro is available in Sinhala, Tamil, and English, offering interactive educational content such as videos, voice guides, and infographics. The app also integrates an online marketplace, developed in partnership with GIZ and Hatch, enabling farmers to connect directly with buyers and expand their reach.

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