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Shocking lapses in revenue collection revealed

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COPA concerned over Rs. 7.5 bn spent on upgrading integrated computer system 

By Shamindra Ferdinando 

Parliamentary watchdog-COPA (Committee on Public Accounts), in its latest report has highlighted significant loss of revenue and misuse of public money caused by the failure on the part of the Department of Inland Revenue, Sri Lanka Customs and Department of Excise to streamline their operations.  

COPA Chairman Prof. Tissa Vitarana presented his first report to Parliament on July 20. The COPA consists of 22 members representing both the government and the Opposition. The COPA report dealt with the Auditor General’s reports on Department of Inland Revenue, Sri Lanka Customs and Department of Excise. 

Pointing out that as at July 31, 2020, there had been 281 vacancies (10 percent of the approved cadre), the all-party committee asserted that failure to fill 183 senior level vacancies in the Inland Revenue Department would hinder the smooth functioning of the institution.  

COPA has questioned the failure on the part of Sri Lanka Customs to recruit a suitable person to the post of Legal Officer. The vacancy hadn’t been filled in spite of the Management Services Department approving the creation of the post, it has pointed out. 

COPA has observed that the Excise Department, too, in spite of receiving approval from the Management Services Department on June 30, 2020 failed to recruit a legal officer though it being an essential post. There had been 35 senior and 66 tertiary level positions among altogether 292 vacancies in what the watchdog committee called a vital part in overall revenue collection mechanism. 

Asserting that the three above-mentioned institutions were responsible for the collection of 90 percent of government revenue, COPA alleged that the continuing failure to streamline operations contributed to corruption. It faulted these institutions for allowing what it called private parties to misappropriate public funds.

Former COPA Chairman and incumbent member lawmaker Lasantha Alagiyawanna yesterday (28) said that tangible measures were required to ensure proper collection of revenue. Acknowledging irregularities had undermined the whole process, the SLFPer explained how those responsible for revenue collection manipulated the system for their benefit at the expense of the national economy.

State Minister of Co-operative Services, Marketing Development and Consumer Protection Alagiyawanna said that the continuing registration of vehicles imported for a particular purpose as dual purpose vehicles was nothing but a crime. Lawmaker Alagiyawanna said that in spite of interventions made by parliamentary watchdogs, COPA, COPE (Committee on Public Enterprises) and COPF (Committee on Public Finance) the situation remained quite unsatisfactory.

Responding to another query, lawmaker Alagiyawanna said that relevant ministers should take remedial measures.

COPE member Dr. Harsha de Silva yesterday said that the government revenue was now at a paltry 9.2 percent of the GDP (Gross Domestic Production). One-time non-cabinet minister de Silva said that perhaps it was one of the lowest in the world. 

Vitarana’s outfit has recommended urgent amendments to Acts pertaining to the Inland Revenue Department as well as Sri Lanka Customs to facilitate the revenue collection process. As regards Sri Lanka Customs and Motor Traffic Department, COPA underscored the urgent need to amend relevant Acts as existing laws seriously hindered revenue collection procedures. COPA also called for modification of existing laws pertaining to the Excise Department to enable the institution to achieve its primary objectives.

Pointing out that a vast sum of money had been spent on developing integrated computer systems, COPA underscored revenue collection mechanisms that couldn’t be perfected without the availability of such methods. COPA called for the development of what it called a National Coordination Plan meant for strengthening of the revenue collection process.

COPA revealed that a staggering Rs 4 bn had been spent so far on modifying/updating the system at the Inland Revenue and a further Rs 3.5 bn was required to complete the work. The 22-member COPA has expressed serious concern over the large amount of funding made available to still unfinished project.

 

 

 



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Prime Minister inaugurates the 2025 Buddha Rashmi Vesak Zone

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The 2025 Buddha Rashmi Vesak Zone, jointly organized by the Hunupitiya Gangaramaya Temple, the Presidential Secretariat, and the Prime Minister’s Office, was ceremonially inaugurated on May 12 by Prime Minister Dr. Harini Amarasuriya.

During the opening ceremony, the Prime Minister shared the following thoughts:

“The Buddha Rashmi Vesak Festival, held with the collective effort of all communities residing in the city of Colombo, is truly special. The religious harmony that exists within Colombo plays a significant role in making this event successful. Thanks to this harmony, we witness a large number of Dansals and Vesak festivities. These Dansals are organized through the collective efforts of people across the city, who contribute both financially and physically to make them possible.

The efforts made by the Chief Incumbent of the Gangaramaya Temple, Venerable Kirinde Assaji Thero, to nurture Sri Lankan Buddhist enlightenment, Buddhist culture, and national identity not only among local Buddhists community but also to foreign Buddhists community and international visitors, must be sincerely appreciated.

At this moment, I also remember with deep sorrow those who lost their lives in yesterday’s tragic bus accident in the Kotmale area, and I extend heartfelt sympathies to their families. I also wish a speedy recovery to those who were injured.”

The event was attended by Minister of Buddha Sasana, Religious and Cultural Affairs, Hiniduma Sunil Senevi, High Commissioner of India, His Excellency Santosh Jha and other High Commissioners and Ambassadors including Secretary to the Prime Minister, Mr. Pradeep Saputhanthri and a distinguished gathering of guests.

(Prime Minister’s Media Division)

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Expert: Mismanagement of CEB hydro resources increases costly oil-powered electricity generation

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Vidura

The Ceylon Electricity Board (CEB) is in one of the strongest hydro storage positions in recent memory, but it has mismanaged key hydropower complexes, causing an increase in oil-powered electricity generation and and costs.

Energy expert Dr. Vidura Ralapanawe has raised serious concerns over CEB’s operational decisions, particularly the skewed use of the Mahaweli and Laxapana hydropower complexes. “By mid-May, the system had ample storage — about 60% overall — which is actually a very good position to be in just before the South-West monsoon rains,” he said. “But within that headline figure is a huge imbalance. Mahaweli reservoirs are near 75%, while Laxapana is languishing at 30%.”

This lopsided storage has already caused direct operational problems. The Canyon power station, which is fed by the Maussakele Reservoir in the Laxapana complex, has been forced to reduce its output. The 60MW plant is now operating at just 40MW due to limited water availability. Downstream, the 100MW New Laxapana station is similarly constrained.

The Laxapana complex is not just another hydropower asset — it plays a vital role in Colombo’s drinking water supply. It is required to run continuously to maintain flows for water treatment plants. “That means the CEB must generate from Laxapana 24/7, no matter what,” Ralapanawe said. “So how did they allow it to reach such a critically low level, especially when Mahaweli reservoirs are full?”

Ralpanawe said: “Instead of making adjustments to maintain operational flexibility, the CEB appears to have run the Laxapana complex harder than necessary in previous months while underutilising Mahaweli, where Victoria and Randenigala are sitting comfortably. The consequence? More reliance on oil-based thermal generation, even as the country’s dams remain well-stocked.”

“This is not just a technical problem — it’s an economic one,” he stressed. “Oil is expensive. When you underutilise hydropower in a year like this, you’re actively choosing to drive up the cost of generation.”

The apparent lack of coordination between the Mahaweli and Laxapana systems is especially baffling given the CEB’s long-standing familiarity with both. “The CEB has operated these systems for over 40 years. They know the inflows, the rainfall patterns, the seasonal irrigation releases — none of this is new,” Ralapanawe said.

Moreover, the growing integration of AI and data-driven forecasting tools in the global energy sector makes such mismanagement increasingly indefensible. “If, in the age of AI, we’re still hearing that ‘it’s too complex’ to manage these reservoirs in tandem, then something is seriously wrong,” he added.

Dr. Ralapanawe urges the CEB to provide an explanation: “Why was Mahaweli underdispatched when it was full? Why was Laxapana overused to the point that we now can’t get full capacity from critical plants like Canyon and New Laxapana? What is the economic impact of burning more oil than necessary?”

The missteps are already costing the public. Higher generation costs will ultimately be passed on to consumers in the form of increased tariffs, a burden made heavier in an already strained economy,” says Dr. Ralapanawe.

Ironically, 2025 was shaping up to be a strong hydro year, offering a rare opportunity for cost savings and reduced fossil fuel use. Instead, mismanagement has left key reservoirs unbalanced and locked the system into a more expensive operating mode — one that benefits oil suppliers but punishes the average household and industry.

Dr. Ralapanawe’s message is blunt: “This is not just about water and electricity. This is about public accountability and economic responsibility. If the CEB cannot manage two hydro systems properly with decades of data at its fingertips, then it must rethink its leadership and planning structures — or risk repeating the same costly mistakes year after year.”

Our efforts to contact CEB officials for comment were in vain.

By Ifham Nizam

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Million Lankan women workers will lose their jobs if Trump’s 44 % tariff goes into effect

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As many as a million Lankan women workers in key export sectors will lose their jobs and income if the 44 percent tariffs imposed by US President Donald Trump come into force at the end of the 90-day pause, Asia News has reported.

Sri Lanka’s main export industries, such as apparel, tea, gems, rubber and cinnamon, that employ mostly women, will be the most affected by the new tariffs since the US market is one of their most lucrative.

Apparel workers reproach the government for its “lethargic attitude” and failure to consider the concerns of workers and unions, not least because their representatives were not asked to participate in the discussions on tariffs.

The apparel industry accounts for about 40 percent of the country’s total exports, and is crucial for its economy. It also employs mainly women from low-income backgrounds in rural areas, for whom these jobs represent a crucial pathway out of poverty.

Since most apparel workers are also breadwinners, their wages help extended family networks in economically disadvantaged regions.

“The Women’s Centre collaborated with 25 other women’s organisations to carry out our campaign against the US tariffs hindering women workers,” said its Executive Director, Padmini Weerasuriya.

If the tariffs go into effect, “Their take-home pay will decrease significantly,” she added. “As orders dip and approximately six million dependents will also be severely impacted.”

“These women need job security as factories are already discussing about possible layoffs of workers, since demand is likely to drop.”

Compared to India and Bangladesh, she warns, Sri Lankan women face greater competition since “the tariffs imposed on Sri Lanka are higher”. That is why several manufacturers are already moving their operations to Vietnam, Bangladesh and Africa.

If plants shut down, more than 350,000 women working will be impacted. AsiaNews met three of them, 33-year-old Subadra Aponsu, 31-year-old Hemamamli Akaravita and 30-year-old Sandamini Tissera who spoke about their difficulties.

“We are the breadwinners of our families as our parents are elderly and sick. Our siblings are married and they are unable to provide for our parents. During the past several years, we have been working hard and providing for our families. If we lose our jobs, we have no option but to mortgage our homes,” they explained.

“During the economic crisis, we had to sell our paddy fields. Currently, our employers are planning to leave the country. We may lose our jobs shortly. We are unable to find employment elsewhere as almost every apparel manufacturer is planning to sell their business. In our boarding house, several women have already lost their jobs.”

According to economic analysts Sampath Amarasinghe and Niroshini Caldera, “due to the new tariffs, there will be a significant decline in export volumes with a severe erosion of Sri Lankan goods’ competitiveness in US markets.” All this, they warn, could result in “many Sri Lankan products ending up out of reach for US consumers and businesses.”

The greatest risk concerns “price- and cost-sensitive categories like garments, where profit margins are already low and competition from other countries is intense.”

The new tariff will see exports to the United States drop by 20 percent, with an annual loss of about US$ 300 million in foreign currency earnings.

As Sri Lanka’s total exports of goods in 2024 reached US$ 13 billion, the experts conclude, this represents “a major blow to the country’s balance of trade” and “economic growth prospects”.

Meanwhile, several women’s groups started a petition last week in the Katunayake Free Trade Zone (the first and largest of the country’s eight FTZs). – (AsiaNews)

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