SRI LANKA NEWS
(DECEMBER 2023)
Compiled by Victor Melder
Sri Lanka’s inflation, as measured by the change in the Colombo Consumers’ Price Index (CCPI) marginally increased to 3.4 percent in November 2023 from 1.5 percent in October, the Department of Census and Statistics reported Thursday. The CCPI for all items for the month of November 2023 increased to 193.4 from 191.4 in October 2023. The Year on Year inflation of Food Group increased to -3.6 percent in November 2023 from -5.2 in October 2023 and the Year on Year inflation of Non Food Group increased to 6.8 percent in November 2023 from 4.9 percent in the previous month. For the month of November 2023, on year‐to‐year basis, contribution to inflation by food commodities was -1.20 percent and the contribution of Non Food items was 4.56 percent. (Colombo Page, 1.12.2023)
Pastor Jerome Fernando has been arrested by the Criminal Investigations Department (CID) this morning in connection with an ongoing investigation against him, his lawyer said. Fernando arrived at the CID this morning for the second consecutive day to give a statement in connection with a controversial Sunday sermon. On Thursday, he gave an 8-hour-long statement to the CID and was arrested this morning after recording further statements. Pastor Fernando arrived at the Bandaranaike International Airport (BIA) on Wednesday morning following a court order that directed authorities not to arrest him in connection with a controversial Sunday sermon. Fernando, who had been under CID investigations for contentious remarks against Buddhism, Islam and Hinduism, left the country on May 15 this year. Pastor Fernando will be produced in court, the lawyer told the media outside the CID.. (Daily Mirror, 1.12.2023)
Compared to other countries, the highest number of elephant deaths are reported in Sri Lanka every year due to the elephant-human conflict in this country, the Sectoral Oversight Committee revealed. This matter was brought to the attention of the Sectoral Oversight Committee on Environment, Natural Resources and Sustainable Development, presided over by Ajith Mannapperuma, on November 24. Accordingly, a committee including Charaka Jayaratne, the convenor of the Environmental Law Section of the Sri Lanka Bar Association, discussed with the officials of the Wildlife Department based on the proposals presented to the committee, mainly focusing on the clauses to be amended in the Wildlife and Flora Protection (Amendment) Act. Attention was paid to some of the main sections related to wild elephants in the Act, where the amendment of Section 3, Section 6, Section 19, Section 20, and Section 30 was discussed. It was proposed that the penalty fees applicable to the killing of wild animals should be revised, and proposals were made to prepare the legal framework necessary to impose appropriate punishments on the relevant offenders by empowering wild elephants as public property. Also, attention was drawn to the installation of illegal high-voltage power lines as one of the cases where wild elephants die frequently in this country. Since there is no clear interpretation of the Animal and Flora Protection Act in this regard, there was a discussion in the committee about the introduction of new clauses, including a clear interpretation and related penalties. Accordingly, the committee recommended re-recording the existing proposals related to the amendment of the Act discussed in the committee, reaching an agreement on the relevant recommendations through a committee established under the Wildlife Department, and finalizing the amendment of the Act under a specific time frame. (Daily Mirror, 1.12.2023)
About a million Sri Lankans were admitted to hospitals due to accidents annually, Minister of Industries and Minister of Health, Ramesh Pathirana said. Dr. Pathirana said there are altogether about six million hospital admissions each year in Sri Lanka. According to the Minister around 30 Sri Lankans die daily due to accidents, and 12,000 die annually due to road and domestic accidents. Pathirana said non-communicable diseases (NCDs) are another major health challenge Sri Lanka will have to face in the future .About 30 percent of people under 35 are suffering from high blood pressure, while 15 percent of the same age group is suffering from diabetes, he said. Ten percent of Sri Lankan children were obese, the Minister said. (Daily Island, 1.12.2023)
Member of Parliament Prof. G. L. Peiris said Parliamentarians cannot be sued for the statements they make in the well of the House in session. Speaking in Parliament on Saturday he said that a Member of Parliament has the right to comment in Parliament and the right to make statement in the well of the the House is a parliamentary privilege given to MPs. Therefore, Prof.G. L. Peiris said that there is no possibility for a person outside to take action or legally punish an MP for making a statement within Parliament. He said that former Speaker Anura Bandaranaike has given an important decision in this regard while noting that securing the privileges of Parliament is the primary task of the Speaker. (Daily News, 4.12.2023)
Sri Lanka’s tourism industry has demonstrated a robust resurgence, surpassing over $ 1.75 billion in earnings during the first 11 months of the year, accompanied by the arrival of over 1.27 million visitors. “As per the provisional figures tourism earnings in the first 11 months are estimated at over $ 1.75 billion, reflecting a 55% increase from the corresponding period of last year, whilst November earnings stood around $ 160 million,” Sri Lanka Tourism Development Authority Chairman Priantha Fernando said. He said November earnings were around $ 160 million, contributing to the overall positive trajectory of the industry. The surge in arrivals during November is particularly noteworthy, with Sri Lanka welcoming 151,496 tourists, a stark contrast to the crisis-ridden 59,759 seen in 2022. Nevertheless, when compared to the benchmark year of 2018, the industry still faces a 22.5% deficit. Sri Lanka Tourism targeted 204,114 arrivals in November, but it fell short of 52,618 tourists becoming the fourth consecutive month to miss the monthly arrivals target. India (30,339), Russia (24,912) and Germany (12,331) emerged as the top source markets in November. Despite setbacks, Sri Lanka Tourism is now cautiously optimistic and actively working to stimulate the sector, aiming to reclaim pre-crisis levels of activity in the coming years. Anticipation is running high for the winter season, with the tourism sector setting ambitious goals to welcome 1.55 million visitors and achieve over $ 2.7 billion in income by year-end. (Daily Financial Times, 4.12.2023)
The Sri Lankan services exports for the period of January to October 2023 increased 67.2% over the corresponding period of 2022. Total exports were US$ 2,606.34 million, a release from Export Development Board said. The services exports consist of ICT/BPM, Construction, Financial services and Transport and Logistics. The estimated value of ICT exports are expected to increase by 96% to US$ 166.01 million in October 2023 when compared to October 2022. Also, the value of Transport & Logistics services exports are expected to increase by 54.73% in October 2023 compared to the corresponding period in the previous year. However in contrast Sri Lanka’s merchandise exports decreased by 14.6 % to US$ 898.0 million in October 2023 compared to October 2022 as per the provisional data released by the Sri Lanka Customs. Also, it is a 13.13 % decrease when compared to the value recorded in September 2023. The decline in merchandise exports is due to decreased demand for export products, particularly in sectors such as Apparel & Textiles, Rubber & Rubber-based products, and Coconut & Coconut-based products. Export earnings from Food & Beverages have increased by 20.77 % y-o-y to US$ 36.86 Million in October 2023, with the strong performance in exports of Processed Food (29.49 %). Export earnings from Seafood increased by 3.73 % to US$ 20.29 Mn in October 2023 compared to October 2022. This increase was mainly due to the strong performance in export of frozen fish (5.21 %) and Fresh fish (13.78 %). Export earnings from Apparel & Textile have decreased by 20.05 % y-o-y to US$ 353.3Million in October 2023 compared to October 2022. Export earnings from tea, which made up 12% of merchandise exports, decreased by 12.02 % y-o-y to US$ 95.63 Mn in October 2023 compared to October 2022. This decline is mainly due to the negative performance in the export of Bulk tea, which decreased by 18.81% to reach US$ 43.35 Mn in October 2023. Among the top 10 export markets, Italy has shown a strong performance in both the month of October 2023 and the period of January to October 2023 when compared to the corresponding periods in the previous year. Furthermore, UAE and France have shown significant performance during the period of January to October 2023 compared to the corresponding period in the previous year. Exports to the United States of America, Sri Lanka’s single largest export destination, decreased 13.84 % to US$ 206.77 Mn in October 2023 compared to October 2022. Further, exports to the United States of America decreased by 19.18% to US$ 2,281.57 Mn in the period of January to October2023 compared to the same period in 2022. (Daily News, 5.12.2023)
The Sri Lanka Air Force today received two Harbin Y-12-IV aircraft from China, marking a significant step in bolstering the nation’s aviation capabilities. The Sri Lanka Air Force initiated preparations to purchase the aircraft in 2017 for the acquisition of two state-of-the-art Y-12IV aircraft. A contract was signed on 16 December 2019 between the Secretary to the Ministry of Defence on behalf of the Sri Lankan Government and the China National Aero-Technology Import & Export Corporation. The Y-12IV aircraft is a Short Take Off and Landing (STOL) aircraft that serves as a versatile light transport aircraft. This particular model, an improved version of the Y-12, incorporates extended wing tips and an increased take-off weight, enhancing its performance capabilities. In addition to fulfilling operational, search and rescue needs, the Air Force Commander highlighted the unique capability of these aircraft to support tourism promotion. Each aircraft has a capacity for 15 passengers. The Commander highlighted the unique ability of the Y-12IVs to land on 90% of Sri Lanka’s runways, making them ideal for promoting tourism in remote and picturesque locations. (Daily Mirror, 5.12.2023)
A group of workers from the Ceylon Electricity Board, engaged in digging for an electricity pole installation in front of the Elections Secretariat office in the Matara Fort, recovered several skeletal remains believed to date back to the Dutch period. Police said the CEB workers reported the discovery of potential human bones to the Department of Archaeology on Wednesday. Subsequently, an investigation was initiated, and the matter was brought to the attention of the Matara Magistrate’s Court. The Magistrate examined the site and also the skeletal remains, which are now at the Matara Star Fort Museum, along with other recovered artifacts. Police said several human skeletal fragments, porcelain pieces, a smoking pipe and various pottery fragments have been discovered at the excavation site. The Magistrate has informed that these fragments should be kept in the museum and the archeology officials have been ordered to carry out further excavations at the site where these bones were found. Archaeological officials have asserted that these findings likely belong to the Dutch colonial period. Matara Police are conducting further investigations. (Daily Mirror, 8.12.2023)
A country-wide power failure caused widespread inconvenience to millions of people last night. Ceylon Electricity Board (CEB) spokesman Noel Priyantha said a transmission system failure in the Kotmale-Biyagama transmission line was reported around 5.10 p.m. He said investigations were continuing to find out what caused the failure, though a lightning strike could be a reason. They would also probe if it was due to sabotage. The sudden loss of power also left roads without street lights, while hospitals, business establishments, and houses were affected. The National Water Supply and Drainage Board warned that the water supply in some areas could be affected due to the power failure. Although the CEB official said power would be restored within three hours, they were able to restore power only in some areas, even by midnight. Colombo and suburban public hospitals had their power supplies restored last night, but in some areas, hospitals remained without power for more than five to six hours. Even though the CEB said it had restored power in certain outstation areas such as Badulla, Ambalangoda, and Mathugama, areas such as Polonnaruwa, Anuradhapura, Jaffna, and Batticaloa had prolonged darkness. As a result of the breakdown, one of the three units operational at the Norochcholai plant had shut down. Officials said it would take three hours to put it into operation again. (Sunday Times, 10.12.2023)
Migrant workers have remitted 5.4 billion U.S. dollars in the first 11 months of 2023, the latest data released by the Central Bank of Sri Lanka (CBSL) shows. The workers remitted 537.3 million dollars in November 2023, up 40 percent from 384.4 million dollars in November 2022, CBSL data showed. Workers sent only 3.3 billion dollars in the first 11 months of 2022, CBSL data showed. Migrant workers’ remittances are one of the main sources of foreign revenues for Sri Lanka. (Daily Island, 11.12.2023)
After a shaky start over the weekend, the Parliament yesterday approved the Value Added Tax (Amendment) Bill in anticipation of the International Monetary Fund’s review for the second tranche of the $ 2.9 billion bailout. This move will now raise the Value Added Tax (VAT) from the existing 15% to 18%, effective from 1 January 2024. The Bill obtained approval with 45 majority votes as 100 Parliamentarians out of the 225-member house voted in favour, while a mere 55 Parliamentarians voted against the legislation. The revised rates will now apply to at least 97 additional items, with items like fuel, fertiliser, and LP gas. This increase in VAT is expected to boost Government revenue by around Rs. 378 billion meeting essential targets outlined in the four-year IMF program. Speaking in Parliament, Finance Minister Ranjith Siyambalapitiya said the new VAT increase is expected to increase state tax revenue to 12.5% of GDP in 2024, up from the current 9.1%. “This forms a component of several economic reforms undertaken by the Government, aiming to raise revenue to 15% of GDP by 2025. The implementation of this revenue measure is crucial for steering Sri Lanka out of its current economic challenges,” he noted. Explaining the rationale behind the tax hikes, Siyambalapitiya underscored the increase in welfare expenditure from Rs. 187 billion in 2023 to Rs. 207 billion in 2024. Furthermore, he highlighted that a significant 70% of the Government’s revenue is allocated for repaying loan interest.
The crucial debate was postponed to Monday after the special parliamentary session called for Sunday to debate the Value Added Tax (Amendment) Bill was adjourned due to the lack of quorum. The Opposition objected to rescheduling the VAT debate to Monday, citing other planned discussions on budget proposals, including irrigation. However, Speaker Mahinda Yapa Abeywardena called for a vote, where the ruling party secured a majority of 57 votes, allowing the VAT debate to proceed yesterday. While the Main Opposition party, the Samagi Jana Balawegaya (SJB) including its leader Sajith Premadasa has strongly criticised the Bill over the week both in Parliament and outside declaring it unjust, notably, during the vote, at least 30 MPs of its 82-strong parliamentary group were conspicuously absent. Under the recent VAT amendment, citizens will now be required to pay taxes on 97 out of the 138 goods that were previously exempted. Notably, certain essential items such as medicines, equipment designed for disabled persons, rice flour, wheat flour, vegetables, fruits, liquid milk, and the 1990 ambulance service will remain exempt from VAT. The Cabinet approved the VAT hike in October. Cabinet spokesman Minister Bandula Gunawardene at the time noted that while state revenue has surged to Rs. 1.7 trillion in the first nine months compared to the previous year, which is just enough to cover public sector salaries, welfare payments, and other recurring expenses. Acknowledging the challenges faced by the public, he added, “We understand the difficulties the public is going through, and although it’s not our preference, we find ourselves compelled to increase taxes.” (Daily Financial Times, 12.12.2023)
Sri Lanka extended restrictions on outward remittances by six months to manage foreign exchange reserves, cabinet spokesperson and transport minister Bandula Gunawardane told reporters at a weekly cabinet briefing on Tuesday. The nation’s central bank suspended permission to remit funds for overseas investments by Sri Lankan residents from mid-2020 except under certain conditions. The restrictions would be further extended for six months from Dec. 28. (Daily News 13.12.2023)
Foreign Employment Bureau statistics revealed that seven hundred and thirty two thousand (732,000) persons have gone abroad for foreign jobs within four years. This is stated in the information obtained from the Kurunegala office of the Foreign Employment Bureau under the Freedom of Information Act. According to the information, this group have gone abroad for other professions such as housekeepers, nurses, labourers, electricians and drivers. There are 15 regional offices of the Sri Lanka Foreign Employment Bureau across the country, and it is also revealed that the people who have gone abroad have done so legally after seeking advice from these offices.In order to get high-paying job opportunities in the world, it is mandatory to empower the Sri Lankan workforce with professional training and skills to match the international labour market, and for this purpose, 17 regional centres of the Sri Lanka Foreign Employment Bureau have been established across the country. According to the information, the number of people who have gone abroad is 59,000 in 2020, 110,000 in 2021, 311,000 in 2022 and 252,000 in 2023. (Daily News, 15.12.2023)
The Court of Appeal issued an order today, extending the retirement age of all doctors to 63 years. The two-judge bench of the Court of Appeal, comprising Justices Nissanka Bandula Karunaratne and Vikum Kaluarachchi, made this order following a writ petition filed by 176 consultant specialist doctors challenging the Cabinet of Ministers’ decision dated 17-10-2022. (Daily Mirror, 15.12.2023)
The National Consumer Front today claimed that a glass of hot water had been sold at Rs. 100 before imposing the new VAT. Its president, Asela Sampath told the Daily Mirror that a similar incident was reported from a vegetarian family restaurant in Jaffna. He claimed that a glass of hot water was sold to customers at a price of Rs. 100. He said a bill issued by the restaurant shows a customer who visited the food centre on December 2 had paid Rs. 1,200 for water for 12 persons. “If a glass of hot water was sold at Rs. 100 before imposing the VAT, it is possible to sell a glass of normal water in restraints at Rs. 50,” Sampath said. (Daily Mirror, 17.12.2023)
An agreement has been reached between India and Sri Lanka to begin work on basic level issues on the digital ID card from next month. The agreement was reached during a discussion held last week between Indian Government representatives and the President’s Chief of Staff and National Security Adviser Sagala Ratnayaka. The new digital ID card, which will be funded by an Indian grant of Rs.4 billion, will include biometric data such as holder’s eye colour, fingerprints and blood type. Earlier, 76 biometrics were needed for digital IDs, but the updated version will need only six. The new digital ID card will furnish the name, address, date of birth, gender, telephone number and email address. The Government aims to first issue the updated digital ID card for new applicants and then gradually introduce it to the entire population. (Sunday Observer, 17.12.2023)
The Executive Board of the International Monetary Fund (IMF) yesterday completed the first review under the 48-month Extended Fund Facility (EFF) arrangement. The completion of the first review allows for an immediate disbursement of SDR 254 million (about $ 337 million), bringing the total IMF financial support disbursed so far to SDR 508 million (about $ 670 million). The total amount of Sri Lanka’s EFF arrangement is SDR 2.286 billion (about $ 3 billion) as of the time of program approval on March 20 (see Press Release ). The program supports Sri Lanka’s efforts to restore macroeconomic stability and debt sustainability, safeguard financial stability, and enhance growth-oriented structural reforms. Following the Executive Board discussion on Sri Lanka, IMF Deputy Managing Director Kenji Okamura issued the following statement:
“Macroeconomic policy reforms are starting to bear fruit and the economy is showing tentative signs of stabilisation, with rapid disinflation, significant revenue-based fiscal adjustment, and reserves build-up.” Performance under the EFF-supported program has been satisfactory. All quantitative performance criteria for end-June were met, except the one on expenditure arrears. All indicative targets were met, except the one on tax revenues. Most structural benchmarks were either met or implemented with delay by the end of October. The publication of a Governance Diagnostic Report, the first in Asia and a structural benchmark under the program, is a commendable first step towards addressing deep-rooted corruption weaknesses. Continued commitment to improving governance and timely implementation of the report’s recommendations can deliver tangible economic gains to all citizens. Sri Lanka’s agreements-in-principle with the Official Creditors Committee and Export-Import Bank of China on debt treatments are consistent with the EFF targets. They are an important milestone putting Sri Lanka’s debt on the path towards sustainability. A swift completion and signature of the Memoranda of Understanding with the official creditors is important. Timely implementation of the agreements, together with reaching a resolution with external private creditors on comparable terms, should help restore Sri Lanka’s debt sustainability over the medium term. To ensure a full and swift recovery, sustaining the reform momentum and strong ownership of reforms is of paramount importance. Key priorities include advancing revenue mobilisation, aligning energy pricing with costs, strengthening social safety nets, rebuilding external buffers, safeguarding financial stability, eradicating corruption, and enhancing governance. Reinforcing the revenue-based fiscal consolidation supported by revenue administration reforms is critical to recover from program slippages and promote a break from past policy shortcomings. The Central Bank of Sri Lanka should continue to focus on the multi-pronged disinflation strategy to safeguard the credibility of its inflation targeting regime. Accumulating reserves, supported by exchange rate flexibility, remains an important priority under the EFF. Implementing the bank recapitalisation plan and strengthening financial supervision and crisis management framework are crucial to safeguard financial sector stability. Further strengthening the social safety net and protecting social spending remains critical to safeguarding the poor and vulnerable. (Daily Financial Times, 15.12.2023)
Bandula, a chilli farmer of Puliyankulama, Anuradhapura has earned a record income of Rs. 10 million from his chilli cultivation on half an acre by yesterday (17). He has recorded the highest yield and income of chillies ever obtained from half an acre, the Agriculture and Plantation Industries Ministry said. Under the Agriculture Sector Modernization Project, he has started chilli cultivation on half an acre in the Puliyankulama area using the new technology of chilli cultivation, the Ministry said. “In particular, MICH 1 and 2, which are the local chilli varieties that give the highest yield in our country, have been selected for this cultivation. Within nine months of starting this chilli cultivation, he has earned an income of Rs. 10 million and this was informed to the Minister of Agriculture and Plantation Industries Mahinda Amaraweera yesterday. The Agriculture Sector Modernization Project has introduced a high density cultivation method and new agricultural technology for chilli cultivation. According to the traditional chilli cultivation method, only 6,000 chilli plants can be planted on half an acre, but under the high density cultivation method, 13,000 plants can be planted. Accordingly, it is acceptable to increase the yield several times. Also, by covering the beds with polythene and using water under the drip irrigation system, there is no wastage of water and no additional money has to be spent on weed control. Half an acre of chilli cultivation at a time requires a minimum amount of chemical fertilizers. Also, because pesticides are not used to control pests, the quality of the chilli also increases. Previously, two farmers who had obtained the highest yield and income from chilli cultivation in our country were reported from the Thirappane and Jaffna areas. They earned Rs. 05 million and Rs. 60 million. Bandula of Puliyankulama has earned an income of more than Rs. 10 million by yesterday (17) and he has the ability to earn at least Rs. 13 million, according to the current market prices for chillies. (Daily Mirror, 18.12.2023)
The Sectoral Oversight Committee on State Financial Strategy (aka Committee on Ways and Means), tasked with inquiring into affected sectors, has revealed that since January 1, 2022, at least 1,198 doctors have migrated. Among them were 348 specialists, the committee chaired by MP Patali Champika Ranawaka, the leader of Eksath Janaraja Peramuna said. The Parliament appointed the Sectoral Committee on State financial strategy in late March 2023. During Dec 13 proceedings of the Committee, involving senior representatives of professional associations, it transpired that over 1,500 doctors, including specialists, had migrated since the onset of the crisis in early 2021. The Committee was also told of the closure of 20 rural hospitals and the vulnerability of 400 more hospitals and units due to dearth of qualified staff. Members of the Committee, MPs Ashok Abeysinghe, S.M.M. Musharaff and Nalaka Bandara Kottegoda participated in the proceedings whereas non-members Anupa Pasquel and Dayasiri Jayasekra participated with the permission of the Chairman. (Daily Island, 19.12.2023)
Some 40 people and 83 wild elephants have died due to human-elephant conflicts from January to this date in the Anuradhapura wildlife zone, Anuradhapura Zonal Wildlife Conservator W.M.K.S. Chandraratne said. The Additional District Secretary pointed out that 40 people had been killed, 47 others rendered disabled and 710 houses and other property extensively damaged by wild elephants and that Rs. 54.9 million has been paid as compensation up to October this year.The Zonal Wildlife Conservator said 49 wild elephants had either been electrocuted by illegal electric traps and 34 others shot dead or had died under natural circumstances. (Daily Mirror, 22.12.2023)
The Department of Census and Statistics (DCS) revealed in its latest report that the overall rate of inflation as measured by the National Consumer Price Index (NCPI) on Year-on-Year basis for November has increased to 2.8%. This was 1 % in October and on a month on month basis the inflation has increased by 1.8%. The department said that the Food-Inflation in November 2023 increased from -5.2% to -2.2% from October to November 2023, while the non-food inflation increased to 7.1% from 6.3% which was recorded in the month of October. The increases in index values were reported for Vegetables (0.62%), Rice (0.14%), Sugar (0.09%), Coconuts (0.06%), Big onions (0.06% ), Green chilies (0.06%), Red onions (0.05%), Limes (0.03% ), Coconut oil (0.02%), Potatoes (0.02%), Mysore dhal (0.01%), Tea dust/leaves (0.01%) and Fresh fruits (0.01% ). The NCPI for all items for the month of November 2023 is 206, which is an increase of 2.4 index points or 1.19 percentage compared to October 2023 for which the index was 203.6. This increase represents an increase in expenditure value of Rs. 1231.49 in the “market basket”. Meanwhile, decreases in index values were reported for Fresh fish (0.19%), chicken (0.08%), dried fish (0.07%), eggs (0.07%), green gram (0.02%) and Chili powder (0.01%). Meanwhile, the price indices of ‘communication’ and ‘education ‘groups remained unchanged during the month, according to the report. (Daily News, 22.12.2023)
Sri Lanka’s merchandise exports increased by 4.4% to US$ 968.8 Million in November 2023 compared to October 2023 as per the provisional data released by the Sri Lanka Customs. However, it is a 2.67 % decrease when compared to the value recorded in November 2022. The estimated value of services exports for the period of January to November2023 was US$ 2,908.61Mn, increasing 68.72% over the corresponding period of 2022. The services exports estimated by EDB consist of ICT/BPM, Construction, Financial services and Transport & Logistics. Export earnings from tea which made up 12% of merchandise exports, increased by 6.78 % y-o-y to US$ 112.82 Mn in November 2023 compared to November 2022. This increase is mainly due to the strong performance in the export of Tea packets, Tea bags and Instant Tea, which increased by 11.82%, 89.23% and 176.17% respectively in November 2023. In addition, Export earnings from Rubber and Rubber Finished products have increased by 12.87 % y-o-y to US$ 78.74Mn in November 2023, with the strong performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (28.32 %). On monthly analysis, export earnings of Coconut based products increased by 21.05 % in November 2023. Export earnings from Seafood increased by 10.48 % to US$ 25.2Mn in November 2023 compared toNovember 2022. Moreover, export earnings from Ornamental fish increased by 9.42 % to US$ 2.44Mn in November 2023. Export earnings from Apparel & Textile have decreased by 11.94 % y-o-y to US$ 395.05Million in November 2023. Export earnings from Food & Beverages have decreased by 3.34 % y-o-y to US$ 43.75 Million in November 2023, with the negative performance in exports of Alcoholic beverages (-37.61 %). In addition, export earnings from the Electrical & Electronics Components decreased by 6.55% y-o-y to US$ 37.39Mn in November 2023 with poor performance in exports of Switches, Boards & Panels (-14.74%) and Electrical Transformers (-54.88 %). Cumulative merchandise exports during the period of January to November2023, decreased by 9.64 % to US$ 10,878.6Million compared to the corresponding period of 2022. Earnings from export of Tea, Spices and Concentrates, Gems & Jewellery, Electronics & Electronic Components and Food & Beverages increased by 4.11%, 8.09 %,0.34%,2.49% and1.85 %respectively during the period of January –November 2023. Earnings from export of Tea increased y-o-y by 4.11% to US$ 1,198.77Mn in the period of January to November 2023. This increase was mainly due to the strong performance in export of Tea packets (12.23%). Meanwhile, earnings from export of Electrical and Electronic Components (EEC) increased by 2.49% to US$ 451.68Mn in the period of January to November 2023. The value of ICT exports is estimated to increase by 47.91% to US$ 1,520Mn in the period of January to November of 2023 compared to the corresponding period of 2022. In addition, Construction, Financial and Transport & Logistics services exports are estimated to increase by 788.1%, 73.72 % and 93.92% respectively in the period of January to November 2023. For the period of January toNovember2023, export earnings from Coconut & Coconut based products decreased by 14.37% to US$ 652.7Mn from the same period last year. Further, export earnings from Seafood decreased by 3.73% to US$ 238.43Mn during the period of January to November. Among the top 10 export markets, Italy and France have shown a strong performance in both the month of November 2023 and the period of January to November 2023. (Daily News, 29.12.2023)
Government income has exceeded the expected goal of around Rs. 2,850 million this year due to numerous productive measures taken in the past few months. “Government revenue is reaching nearly three trillion rupees,” said Director General of the State Revenue Unit of the President’s Office, (SRU PO) M. J. Gunasiri Comparing global standards, Gunasiri said that in many countries, VAT revenue constitutes between 6-8% of the Gross Domestic Product (GDP). “However, in Sri Lanka, the VAT revenue for the current year is at 2.2% of GDP. The expectation is to increase VAT revenue to around 4% of GDP in 2024.” While acknowledging that this is not an optimal level, Gunasiri stressed the importance of implementing mechanisms for sustained economic activities. “To achieve this, the 2024 budget has proposed a comprehensive program for the digitisation and integration of all institutions.” Gunasiri said that if people or businesses unreasonably increase the prices of goods, the Government and the public have the means to take measures in response. (Daily News, 31.12.2023)
The Commissioner of the Department of Inland Revenue, A. M. Nafeer, said that there is a notable increase in the number of registered taxpayers. “In 2022, 73,444 companies were registered, a number that grew to 81,909 by the end of November 2023.” For individuals, the count rose from 204,467 in 2022 to 500,196 by the end of November this year. Joint ventures recorded an increase from 13,776 to 15,579. Income tax registrations surged from 41,636 to 242,679, while VAT registrations rose from 10,604 to 13,546. Highlighting the financial impact, Nafeer said that the income of the Inland Revenue Department, which was Rs. 1,025 billion in 2019, decreased to Rs. 500 billion in 2020. However, this year witnessed a significant increase to Rs. 1,500 billion, achieved through broadening the tax base and modifying tax rates. To enhance tax compliance, Nafeer said that starting from January 2024, all those above the age of 18 must obtain a Tax Identification Number (TIN) from the IRD. He said that obtaining the registration number and opening tax files are two distinct processes. While everyone has a national identity card number, the Inland Revenue Department’s registration number (TIN Number) is also mandatory. It is essential to open a file for income tax payment only if individuals have sufficient income to be liable for taxation. The Director of the State Revenue Unit of the President’s Office K.K.I Eranda, outlined the significance of the VAT as a primary revenue generation tool for the country. “The initial expectation for VAT revenue in 2023 was over Rs. 600 billion, but only around Rs. 450 billion has been collected.” (Daily News 31.12.2023)
