2025-03-08
The proposal submitted by the Ministry of Finance to increase the Excise Duty received the approval of the Committee on Public Finance. This approval was granted during the meeting of the Committee on Public Finance held on 06.03.2025 in Parliament, chaired by (Dr.) Harsha de Silva, Hon. Member of Parliament.
The Committee considered Gazette Extraordinary no. 2418/42 published under the Excise Notification No. 01/2025 (Excise Duty of Liquor) issued under the Section 22 of the Excise Ordinance (Chapter 52), Gazette Extraordinary no. 2418/43 published under the Order under the Section 3 of the Excise Special Provisions) Act, and Gazette Extraordinary no. 2415/79 published under the Regulations under section 112 of the Regulation of Insurance Industry Act No. 43 of 2000 at the Committee meeting held.
Accordingly, the Committee deliberated on the Order under Section 3 of the Excise (Special Provisions) Act, No. 13 of 1989, as well as Excise Notification No. 01/2025 issued under Section 22 of the Excise Ordinance (Chapter 52).
Officials who presented their views on the matter stated that under the Order pursuant to Section 3 of the Excise (Special Provisions) Act, No. 13 of 1989, an increase of 5.9% has been proposed for the excise duty imposed on all items subject to a fixed rupee value-based excise duty, including motor vehicles, cigarettes, aerated beverages, and tobacco products. Furthermore, under the Excise Notification No. 01/2025 issued under Section 22 of the Excise Ordinance (Chapter 52), an increase of 5.9% in the excise duty on liquor products has also been proposed, the officials said.
Expressing his views, the Committee Chair stated that the increase in the excise duty on cigarettes cannot be approved without concrete data and emphasized the need for justification regarding the steps taken to increase the excise duty on cigarettes. Furthermore, he pointed out that studies conducted on excise revenue from cigarettes indicate that this calculation method has led to a decline in government revenue while increasing the profits of particular manufacturing companies. Therefore, he stressed the importance of ensuring that this tax revision would indeed be beneficial to government revenue. Consequently, the Chair decided to reconsider the Order issued under Section 3 of the Excise (Special Provisions) Act, No. 13 of 1989 at the next Committee meeting following further clarifications from officials of the Ministry of Finance, regarding the excise duty increase.
Moreover, the proposal to increase the excise duty on liquor under Excise Notification No. 01/2025 issued under Section 22 of the Excise Ordinance (Chapter 52) was considered and approved by the Committee. During the discussions, Members of Parliament raised concerns that such tax increases could potentially drive individuals towards the consumption and production of illicit liquor. In response, officials stated that raids against illicit liquor operations are being conducted systematically. Additionally, they mentioned that within the past two months, the production of liquor in the country had increased by 22%, while revenue had grown by 23%. Furthermore, it was stated that plans are underway to introduce a new category of liquor with the aim of minimizing the consumption of illicit liquor.
Additionally, the Regulations issued under Section 112 of the Regulation of Insurance Industry Act No. 43 of 2000, published in Gazette Extraordinary No. 2415/79, were considered and approved by the Committee. Under this regulation, the annual levy payable by insurance companies to the Insurance Regulatory Commission of Sri Lanka (IRCSL) has been proposed to be increased from 0.125% to 0.2% of the gross written premium in order to cover the increased expenditure of the Commission.
During the discussions, the Chair informed the Committee of certain instances where the Insurance Regulatory Commission of Sri Lanka (IRCSL) had not carried out regulatory functions effectively. He further expressed his dissatisfaction regarding the delayed actions taken by the Commission under the prevailing law concerning the situation at MBSL Insurance. He instructed officials to keep the Committee informed of future measures to be taken in this regard. Moreover, the Committee emphasized the necessity for the Insurance Regulatory Commission of Sri Lanka to develop and present a strategic plan to enhance the insurance sector as an industry in the country.
The Committee also held an extensive discussion on the complexities involved in obtaining claims under third-party insurance. It was highlighted that there is a need for simplified regulations to ensure that claimants can access third-party insurance funds more easily in the event of an accident. The Committee directed the Insurance Regulatory Commission of Sri Lanka to address this matter.
Additionally, the Chair drew the attention of the Committee to the possibility of utilizing funds deposited in insurance reserves through banking mechanisms for development purposes. Consequently, the Director General of the Insurance Regulatory Commission of Sri Lanka was instructed to formulate and submit a regulatory framework for this purpose after engaging in discussions with industry stakeholders.
The Committee also discussed taxation related to casinos. The Chair pointed out that while taxes are imposed on physically established casino establishments, a large number of online casinos operate without any taxation. He stressed the need to address this issue and bring these online casinos under a regulatory framework. Furthermore, he reiterated that the Committee had been working for years to establish a Casino Regulatory Authority and stated that steps would be taken to inform the Attorney General’s Department to expedite the drafting of the necessary legislation.
This meeting was attended by Hon. Deputy Ministers (Dr.) Harshana Suriyapperuma and Chathuranga Abeysinghe, along with Hon. Members of Parliament Ravi Karunanayake, Harshana Rajakaruna, (Dr.) Kaushalya Ariyaratne, Nimal Palihena, Wijesiri Basnayake, and (Attorney-at-Law) Lakmali Hemachandra.
2026-10-02
Following discussions, the Sectoral Oversight Committee on Governance, Justice and Civil Protection approved the Anti-Corruption (Amendment) Bill.The decision was made when the Sectoral Oversight Committee met in Parliament recently (Sep. 30) under the chairmanship, Hon. Member of Parliament Dr. Najith Indika.During the meeting, the Committee discussed practical issues that have arisen in implementing the Anti-Corruption Act, No. 9 of 2003, discrepancies between the Sinhala and English versions of the Act, the electronic system for submitting declarations of assets and liabilities, and public access to such declarations.The Committee also discussed matters including resolving the technical and administrative issues affecting the effective implementation of the Act. Following these discussions, the Committee granted its approval to the Anti-Corruption (Amendment) Bill.
2026-09-30
It was revealed at the Ministerial Consultative Committee on Youth Affairs and Sports, which met recently in Parliament under the chairmanship of Hon. Minister of Youth Affairs and Sports Sunil Kumara Gamage, that arrangements are being made to gazette and present to Parliament a new Bill prepared to completely reform the governance structure of Sri Lanka Cricket.It was stated before the Committee that the proposed new cricket governance structure would include independent directors. Under the proposed new legislation, District Cricket Associations will no longer engage directly in decision-making with Sri Lanka Cricket, but will instead function through Provincial Cricket Associations.The Committee was also informed that Sri Lanka Cricket provides Rs. 900 million annually, together with equipment, for school cricket. It was further revealed that plans have been proposed in consultation with the Ministry of Education, Higher Education and Vocational Education to formalize the recruitment of coaches and the player selection process.Meanwhile, the Committee reviewed the progress in implementing the recommendations of the Auditor General relating to sports associations. It was stated that 33 sports associations have completed the relevant recommendations, while reports are due to be obtained in respect of a further 33 associations.The Ministry has instructed that the collection of fees for walking tracks and sports complexes used by the public for health and exercise activities be suspended immediately. The Ministry’s policy that sports facilities should be maintained not as profit-making ventures, but as a government responsibility for the promotion of national health and community welfare, was also emphasized.It was also stated that, under the plan to provide at least one synthetic running track in every province, the next synthetic track is scheduled to be constructed in Anuradhapura. The Committee was informed that there are currently only two synthetic tracks in the country.The Committee also discussed matters relating to the development of sports facilities in the Ampara District, the development of Weber Stadium in Batticaloa and the Hingurakgoda Sports Complex, improvements to sports facilities in the Hali-Ela area of Badulla, and resolving issues at the Bandaragama Public Grounds in Kalutara.Furthermore, the Committee was informed that when allocating government funds for international competitions, funding will be provided only for official national teams representing Sri Lanka and officially recognized international tournaments. It was also revealed that no discrimination based on race or region would be made when selecting national teams or sending teams to participate in overseas competitions.The meeting was attended by Hon. Deputy Minister of Youth Affairs Dinidu Saman Hennayake, other Deputy Ministers, Hon. Members of Parliament, officials of the Ministry of Youth Affairs and Sports, and members of the Transformation Committee of Sri Lanka Cricket, among others.
2026-09-30
The Subcommittee on Shortage of Physical Resources in Schools discussed the progress of the General Education Modernization Programme (GEM) implemented by the Ministry of Education.The Subcommittee, appointed by the Ministerial Consultative Committee on Education, Higher Education and Vocational Education to investigate the shortage of physical resources in schools, considered these matters at a meeting held recently in Parliament under the chairmanship of Hon. Member of Parliament Samanmali Gunasinghe.Officials of the Ministry of Education briefed the Subcommittee on the work carried out in schools under the programme, which is being implemented with the assistance of the World Bank. The Subcommittee emphasized the need to further expedite the activities being carried out under the programme and instructed officials to submit a detailed report on its progress.The Subcommittee further emphasized the need to take necessary measures to address the requirements relating to sanitary facilities and drinking water facilities in schools, particularly to ensure the quality and safety of drinking water.The Subcommittee also conducted an extensive review of the progress of the programme to provide telecommunication facilities to schools, as well as the progress of programmes to establish model primary schools.Hon. Members of Parliament R.M. Samantha Ranasinghe and Padmasiri Bandara, together with officials of the Ministry of Education, also participated in the meeting.
2026-09-30
Following discussions with officials of the Central Bank of Sri Lanka regarding Foreign Exchange Regulations Nos. 01 and 02 of 2026 and the Order issued under Section 22 of the Foreign Exchange Act, the Committee on Public Finance approved the said Regulations and Order.The matter was considered at a meeting of the Committee on Public Finance held in Parliament recently under the chairmanship of Hon. Member of Parliament Dr. Harsha de Silva. The Committee examined the relevant provisions relating to foreign investments, the transfer of funds overseas by emigrants, and measures to control foreign exchange outflows from the country.Hon. Deputy Ministers Chathuranga Abeysinghe and Nishantha Jayawera, as well as Hon. Members of Parliament Ravi Karunanayake, Ajith Agalakada, Nimal Palihena, Wijesiri Basnayake, Thilina Samarakoon, Champika Hettiarachchi and Attorney-at-Law Lakmali Hemachandra, participated in the meeting.Officials representing the Ministry of Finance, Sri Lanka Customs, the Department of Trade and Investment Policy, the Department of Import and Export Control, the Central Bank of Sri Lanka and its Department of Foreign Exchange also participated in the meeting.The Committee focused on the provisions relating to investments made overseas by persons resident in Sri Lanka under Foreign Exchange Regulations No. 01 of 2026. Discussions were held on persons eligible to make foreign investments, the sectors in which investments may be made, and the applicable restrictions on transferring capital overseas. Attention was also given to the opportunities available for Sri Lankan companies to expand their business operations overseas and the financial facilities required for such expansion. With regard to Foreign Exchange Regulations No. 02 of 2026, discussions were held on the procedures and restrictions applicable to emigrants transferring assets held in Sri Lanka overseas. In particular, the Committee was briefed on the existing provisions relating to the transfer of capital overseas under the Emigrant’s Allowance, as well as the remittance overseas of current income such as rental income, interest and dividends.Meanwhile, the Committee also discussed the Order issued under Section 22 of the Foreign Exchange Act. Officials of the Central Bank explained the temporary restrictions currently in place to manage foreign exchange outflows, taking into consideration the prevailing economic conditions and the need to safeguard foreign exchange reserves.The officials further informed the Committee that consideration is also being given to gradually relaxing these restrictions as economic conditions improve.The Committee also discussed the export earnings brought into the country by exporters during the previous year and the opportunities available to use a portion of those earnings for the expansion of businesses overseas. The importance of providing facilities required by local businesses to expand their operations in international markets was also highlighted.The Committee further focused on investigations into the unauthorised outflow of foreign exchange from the country and the monitoring mechanisms in place in this regard. Measures taken to minimise discrepancies between banking and Customs data relating to imports and exports were discussed, along with the need to strengthen coordination among relevant institutions to prevent the misuse of foreign exchange.In addition, the Committee considered the restrictions on bank guarantees and other financial facilities required by local companies, including construction companies, when seeking business opportunities overseas.During the discussion, Committee members also pointed out that imposing unnecessary regulations could discourage businesses and create a risk of hindering economic growth. Expressing his views, the Chairman pointed out that restricting foreign exchange outflows could also result in a reduction in the amount of foreign exchange flowing into the country.The Chairman also questioned why the amount specified in the Regulations as USD 2 million had been stated as USD 0.75 million in the Order in relation to the expansion of listed companies.In response, officials of the Department of Foreign Exchange stated that the USD 0.75 million limit would apply only for a period of approximately six months, and that consideration would be given to relaxing the limit in 2027. They further stated that the corresponding limit for non-listed companies is USD 0.2 million.The Department of Foreign Exchange stated that foreign exchange exceeding these limits may be converted with the approval of the Monetary Board of the Central Bank of Sri Lanka. It was also explained that such approval would be granted based on the balance sheet of the business. However, views were also expressed that businesses with higher asset levels may have greater opportunities to obtain such approval.
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