Although gems and jewellery worth US$477 million were exported in 2023, exports have fallen by 25% to US$360 million last year (2024) after the imposition of taxes on the gem and jewellery industry, says Chairman of the National Gem and Jewellery Authority (NGJA) – Mr. Navin Sooriyarachchi.

He stated this at a media briefing held at the Government Information Department yesterday (July 07).

This media briefing was held to inform the media about the newly opened VAT Refund Counter at the Bandaranaike International Airport in Katunayake.

He said that following discussions with the International Monetary Fund (IMF), taxes were imposed on their industry from January 01, 2024.

Accordingly, an 18% VAT was imposed when selling gems and jewelry to tourists as well as when importing rough gemstones. In addition, a 45.14% tax was imposed on gold imports, he added.

Noting that the NGJA has issued about 8,000 mining licenses, he said that these should produce gemstones worth over US$ 1.5 billion annually, assuming that around 50% of these mines were profitable.

He added that Gem and Jewellery had the potential to be the second largest primary export of the country.

However, following the imposition of the 18% VAT, sales have declined significantly, Mr. Sooriyarachchi says, adding that competitive practices such as post purchase VAT refunding followed by other countries have further affected this situation.

The government has announced that Value Added Tax (VAT) at 18% will be imposed on income earned through online services provided by foreign individuals and platforms to users in Sri Lanka, effective Oct. 01.

This move follows the issuance of an extraordinary gazette notification by the Commissioner General of Inland Revenue, Rukdevi Himali Fernando, aimed at regulating and taxing the growing sector of cross-border digital services.
Under the new regulation, the VAT will apply to a wide range of services, including but not limited to:

• Software as a Service (SaaS)
• Online stores and marketplaces
• Digital advertising and marketing
• Cybersecurity and IT support services
• Video, music, and live-streaming platforms
• Online banking and financial tech services
• Social media and on-demand platforms
• Hotel booking and ticket reservation apps
• Online gaming platforms

The regulation also clarifies that any other digital service provided via an electronic platform from outside Sri Lanka to individuals residing in the country will be subject to VAT, even if not explicitly listed.

Foreign service providers are required to register for VAT if their supply of services exceeds Rs. 60 million annually or Rs. 15 million in the past three months. Prior to registration, such non-residents must also obtain a Taxpayer Identification Number (TIN).

This development comes amid growing debate over taxing foreign exchange earners and aims to expand the country’s tax base in the digital economy.

(dailynews.lk)

(Except for the headline, this story, originally published by dailynews.lk has not been edited by SLM staff)

Residents of Lake Drive, Colombo 08, have voiced strong objections to a proposed 12-storey apartment complex by Prime Residencies, titled “The Golf – Colombo 08,” claiming that it is being promoted without obtaining all the necessary approvals.

Promotional social media posts by Prime Residencies state the project will include 64 units, with buyers able to reserve units by paying just 25% upfront.

However, an investigative programme by ‘Ada Derana’ reveals that the Urban Development Authority (UDA) has clarified that the project currently has only conditional approval, dependent on additional clearances from 07 other bodies, including the Central Environmental Authority (CEA), the National Building Research Organization (NBRO), and the Colombo Municipal Council’s Drainage and Water Supply Unit.

It adds that the Prime Residencies, owned by the Prime Group’s Chairman – Premalal Brahmanage, has not yet officially applied for some required approvals.

‘Ada Derana’ points out that in this backdrop, promoting and securing deposits for an apartment complex that lacks final approvals is misleading, especially if any remaining permits are ultimately denied.

Concerns have also been raised over whether the existing Lake Drive road infrastructure can handle such a large development.

‘Sri Lanka Mirror’ also learns that the company’s much-promoted “5% payment scheme” for its projects has also come under scrutiny in this backdrop.

Prominent residents, including former Sri Lanka Cricket Secretary – Nishantha Ranatunga have voiced their concerns over the project.

The relevant video report of ‘Ada Derana’ is as follows :