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CoPF backs proposal to increase Excise Duty

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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 March 06 in Parliament, chaired by MP Dr. Harsha de Silva
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.

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GoSL to develop unique Food Security Index for SL

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The government is currently prioritizing the development of a country-specific Food Security Index, with the goal of completing the initiative within the next three months.

This tailored index is expected to better reflect Sri Lanka’s unique food security landscape, addressing the limitations of global indices such as the Global Food Security Index (GFSI), which have been criticized for failing to capture the nuances of the local context. Policymakers have also noted that existing data is often insufficient or imprecise, making it challenging to develop effective strategies.

The proposed index aims to identify key national priorities and guide food security policy over the next five years.

As a first step in this effort, a workshop titled “Identifying a Suitable Food Security Index for Sri Lanka and Formulating a Strategic Plan” was held today (17) at the Colombo City Center. Organized by the Food Security Expert Committee in collaboration with the Food and Agriculture Organization (FAO) and the World Food Programme (WFP), the event brought together experts and stakeholders from across the sector.

Delivering the opening remarks, Senior Additional Secretary to the President Kapila Gunaratne emphasized the importance of the initiative, stating that the development of a precise, country-specific index is a vital step toward ensuring both economic stability and national food security. The workshop focused on the four key dimensions of food security; availability, accessibility, utilization and stability and explored how these can be incorporated into a comprehensive and practical national index.

Participants included members of the Food Security Expert Committee, such as Senior Professors Buddhi Marambe and Jeevika Weerahewa, along with representatives from various government agencies, academic institutions, the FAO, the WFP and the private sector.

(President’s Media Division)

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Several Opp. MPs walk out of Parliament

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Several opposition members of Parliament have walked out of the Parliament chamber today (June 17.) in protest over the actions of the Speaker of House, according to Chief Opposition Whip Member of Parliament Gayantha Karunathilleka.

MP Karunathilleka noted that several MPs including those from the Samagi Jana Balawegaya (SJB), walked out of Parliament after the Speaker refused to allocate time to discuss the on-going Iran-Israel conflict.

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SL – France sign key debt restructuring agreement

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Sri Lanka and France signed a bilateral agreement yesterday (June 16) in Colombo, marking a major milestone in Sri Lanka’s external debt restructuring process, the Ministry of Finance announced.

The bilateral agreement was signed by Mahinda Siriwardana, Secretary of the Ministry of Finance, Planning, and Economic Development, on behalf of the government and William Roos, Assistant Secretary, Multilateral Affairs, Trade and Development Policies Department, Directorate-general of the Treasury, on behalf of the government of France.

The statement by the Finance Ministry added that the government of France played a pivotal role in spearheading Sri Lanka’s external debt restructuring process, co-chairing the Official Creditor Committee alongside Japan and India.

The Ministry noted that the agreement would further strengthen the longstanding bilateral relationships between the two nations.

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