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Sri Lanka seeks Thai investments at Colombo Port City – Gen Prayut seeks talks on FTA



Ambassador Colonne with Thai PM Gen. General Prayut Chan-o-cha

Sri Lankan Ambassador in Bangkok Chaminda Colonne has requested Thai Prime Minister Gen. Prayut Chan-o-cha, to explore the possibility of investing in Colombo Port City project.

During her first courtesy call on the Premier at the Government House in Bangkok, Ambassador Colonne on Monday (6) invited Thai investors and on her request General Prayut directed the Board of Investment of Thailand to conduct a virtual meeting with the Colombo Port Commission and Sri Lanka Board of Investment.

Ambassador Colonne, who is also Sri Lanka’s Permanent Representative to United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) extended warm greetings to Prime Minister Prayut Chan-o-cha from President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa.

Both recalled longstanding excellent bonds of friendship and cooperation between the two countries dating back to many centuries deeply rooted in the Theravada Buddhist traditions. Prime Minister and Defence Minister General Prayut Chan-o-cha conveyed great affection towards the Government and People of Sri Lanka.

Emphasising on enhanced cooperation between Sri Lanka and Thailand in the fields of export, investment, especially in the context ofthe new normal, Prime Minister General Prayut Chan-o-cha emphasised the need for accelerating negotiations on a bilateral Free Trade Agreement (FTA). Both assured to strengthen bilateral economic and trade ties leading to an increased trade volume and to enhance investment with a win-win approach.

Prime Minister General Prayut Chan-o-cha also assured to continue in assisting Sri Lanka’s COVID-19 pandemic recovery and to provide technical cooperation in the fields of agriculture, fisheries and artificial rainmaking.

While highlighting her intention of promoting economic diplomacy with the Government of Thailand, especially in the ten areas identified under the Strategic Economic Partnership (SEP) and ‘One Village one Product’(OVOP) concept in Sri Lanka, Ambassador Colonne assured strong commitment during her tenure of office for consolidating Sri Lanka-Thai bilateral relations for mutual benefit.

Prime Minister General Prayut Chan-o-cha welcomed the proposal made by Ambassador Colonne to opening of a Thai language teaching centre in Sri Lanka and Sinhala language teaching centre in Thailand with a view to eliminate the language barrier between the two nations and to enhance people to people contacts.

Commending on excellent leadership of Sri Lanka as the Chair of Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Prime Minister General Prayut Chan-o-cha stated that Thailand looked forward to takeover of Chairmanship at the fourthcoming 5th BIMSTEC Summit and Ambassador Chaminda Colonne, assured Sri Lanka’s fullest support for Thailand’s future endavours in BIMSTEC.

Prime Minister Prayut Chan-o-cha also conveyed his warm best wishes to President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa and Foreign Minister Prof. G.L. Peiris.

Ambassador Chaminda Colonne also extended an invitation to Prime Minister General Prayut Chan-o-cha to visit Sri Lanka at a mutually convenient time with the recovery from the COVID-19 pandemic.

Advisor to the Prime Minister Bansarn Bunnag, Deputy Secretary-General to the Prime Minister Anucha Burapachaisri, Government Spokesperson Dr. Thanakorn Wangboonkongchana, Director-General, Department of South Asian, Middle East and African Affairs of the Ministry of Foreign Affairs Darm Boontham of Thailand and the First Secretary Saritha Ranatunga of the Sri Lanka Embassy joined the discussion.

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Heat Index at Caution level in Northern, North-Central, North-western and Eastern provinces and Monaragala and Hambanthota districts




Heat index Advisory Issued by the Natural Hazards Early Warning Centre At 07.30 a.m. 28 May 2023, valid for 28 May 2023

Heat index, the temperature felt on the human body is expected to increase up to ‘Caution’ level at some places in Northern, North-Central, North-western and Eastern provinces and Monaragala and Hambanthota districts.

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GCE Ordinary Level examination commences on Monday (29)




The General Certificate of Education (Ordinary Level) examination 2022 (2023) will commence on Monday (29).

472,553 candidates have applied to to sit this years examination which will be held at 3568 examination centers

The examination will conclude on 8th June 2023

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Personal income tax shock dims economic activities



ECONOMYNEXTSri Lanka’s personal income tax hikes have hit economic activity in the first quarter though despite currency stability helped businesses cut prices, Hemas Holdings, a top consumer goods group has said.As the currency stabilized, as central bank ended contradictory money and exchange policy conflicts, businesses had cut prices. Mainstream economists generally claim that price falls lead to delayed transactions and try to generate positive inflation through money printing, though businesses believe otherwise.

“The market witnessed price reductions and promotional trade schemes to stimulate consumption,” Hemas Holding told shareholders in the March quarterly statement.

“However, changes made to the personal income tax structure severely impacted modern trade sales volumes as consumers rationalised their purchases under reduced disposable income levels.”

Sri Lanka hiked personal income tax rates in 2023. Value added taxes were raised to 15 percent from 8 percent last year. Another 2.5 percent cascading tax was imposed on top of VAT, the effect of which was estimated to be around 4.5 or more through the cascading effect.

While value added tax allows the government to get tax revenues after citizens make transactions and getting the economy to work, based on best decisions needed to drive the economy to satisfy real needs, income tax kills economic decisions and transfers money to state actors, analysts say.

Net gains on income tax therefore comes at a cost of lost value added tax as well as killed real economic activities which would otherwise have been based on decisions of those who earned the money.

UK also almost doubled VAT in 1979, also to 15 percent, cut the base income tax rate and widened thresholds above inflation to give choice to individuals, amid criticism from Keynesian style or mainstream economists to recover the economy, after two back-to-back IMF programs failed to deliver concrete results, analysts point out.At Hemas Holdings, group revenues went up 52.6 percent to 32 billion rupees in the March 2023 quarter from year earlier amid price inflation as the rupee fell, and cost of sales went up 45.1 percent to 22.2 billion rupees, allowing the group to boost gross profits 72 percent to 9.8 billion rupees, interim accounts showed.

However, administration costs went up 54 percent, selling and distribution costs went up 36 percent, and finance costs went up to 1.3 billion rupees. Profit after tax was flat at 1.06 billion rupees.Sri Lanka’s central bank stabilized the rupee in the second half of 2022 after the rupee collapsed from 200 to 360 to from two years of money printing and also removed a surrender rule in March allowing the exchange rate appreciate.

The US Fed also tightened policy from March 2022 helping bring down global commodity prices after triggering inflation not seen for 40 years through Coronavirus linked money printing or accommodating a real shock through monetary expansion.

“While the modern trade channels witnessed a slow down due to the adverse impact of the tax reforms and high cost of credit on the middle-class urban population, the general trade channels experienced significant growth and increased foot fall,” Hemas told shareholders.

“The decline in global commodity prices in the second half of the year, enabled the business to make price reductions across the portfolio.

“However, the benefit of appreciation of the Sri Lankan Rupee in March 2023 was not seen during the quarter due to the lag effect but is expected to realise in the quarters to come, provided the current economic conditions prevail.”

Hemas is also has operations in Bangladesh where the central bank is also buying up government securities with tenors as long at 20 years to mis-target the interest rate, triggering forex shortages and depreciating the Taka, according to analysts who study the country.

Inflation had hit 9.3 percent in Bangladesh by March.

“In the face of numerous challenges including slowdown in the global economy, depreciation in Taka, heightened inflation and depleting foreign currency reserves, the country entered an IMF programme in January 2023,” the firm said.

“The value-added hair oil market witnessed a degrowth, as consumers curbed consumption in many non-essential items and switched to value-for-money alternatives.”

Mainstream economists mis-target rates to boost growth known as either monetary stimulus or bridging an output gap, though the effort result in instability and economic contractions.

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