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v2025

News

Sri Lanka Revamps ODA Framework to Power Climate Goals

Sri Lanka has unveiled a transformative framework to align Official Development Assistance (ODA) with its national development and climate resilience agenda. The new National Climate Finance Strategy 2025–2030, launched by the Ministry of Finance, Planning and Economic Development with support from the United Nations Development Programme (UNDP), aims to channel foreign aid toward climate adaptation, sustainable infrastructure, and inclusive growth.

Treasury Secretary Dr. Harshana Suriyapperuma said the strategy marks “a critical step in turning climate policy into tangible results,” noting it would strengthen financial accountability and transparency. “It allows us to build resilience, cut emissions, and protect vulnerable communities while ensuring value for every dollar of public spending,” he added.

From 2021 to 2024, Sri Lanka received more than USD 2 billion annually in ODA, mostly directed to renewable energy, transport, water management, and health projects. Over the past five years, total ODA inflows amounted to USD 10.9 billion, including USD 10.7 billion in concessional loans and USD 147.9 million in grants. Following Sri Lanka’s recent reclassification from IBRD to IDA status, the country is refocusing aid utilization to support long-term development goals instead of fragmented, donor-led projects.

Under the new framework, the Department of External Resources (ERD) will act as the central coordination hub for all ODA-related activities. The ERD will streamline project approvals, align foreign-funded initiatives with national priorities, and monitor outcomes through a centralized digital reporting system that enables public access to performance data and transparency in donor-funded projects.

A core component of the initiative is the close integration of ODA with Sri Lanka’s climate finance strategy. The plan prioritizes renewable energy, water resource management, and climate adaptation, while introducing innovative tools such as green bonds, blended finance, disaster-risk insurance, and carbon trading to attract private capital alongside donor funding.

International partners including Japan, the World Bank, the Asian Development Bank (ADB), and the UK-funded Climate Finance Network have already shown interest by extending concessional financing and technical support for renewable energy and coastal protection programs. Officials emphasized that the new model focuses on outcome-based partnerships rather than traditional aid transfers.

However, challenges remain. Building the institutional and technical capacity to design and manage complex, multi-donor projects will require sustained effort. Coordination among ministries and partners with diverse goals is another obstacle. Yet, policymakers are optimistic that the framework provides the structure to overcome these hurdles and deliver visible results.

With climate-related losses estimated at over 2% of GDP annually, the strategy envisions annual investments of nearly USD 500 million for climate-resilient infrastructure and ecosystem restoration. If effectively implemented, it could redefine Sri Lanka’s relationship with foreign partners turning ODA from a temporary economic buffer into a catalyst for sustainable growth and national renewal.

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IMF, World Bank Press Sri Lanka to Fix Aswesuma Data

Sri Lanka’s flagship Aswesuma social welfare program, designed to support low-income families, has come under renewed international scrutiny as the World Bank and International Monetary Fund (IMF) urge the government to strengthen its targeting mechanism, maintain accurate beneficiary databases, and improve program transparency.

At a recent parliamentary meeting attended by World Bank representatives, senior Finance Ministry officials, and members of key parliamentary committees on finance and economic development, international partners stressed the urgent need for a comprehensive and continuously updated digital database to ensure that welfare benefits reach genuinely poor and vulnerable citizens.

According to a statement from the Parliament Secretariat, World Bank officials said the establishment of a reliable social security data system is “a productive investment” that will allow authorities to correctly identify eligible households and prevent inclusion errors and political bias. They further clarified that merely being listed in the system does not guarantee Aswesuma eligibility each case must be verified through data analysis.

The Aswesuma program, which replaced the long-running Samurdhi welfare scheme, is a key pillar of Sri Lanka’s IMF-backed reform agenda aimed at improving fiscal efficiency and reducing poverty through better-targeted subsidies. However, the initiative has faced widespread criticism for exclusion errors, data inconsistencies, and lack of transparency in beneficiary selection.

The IMF, in its recent review of Sri Lanka’s Extended Fund Facility (EFF), reiterated that reforms to the social protection system are central to the bailout program’s success. The Fund has emphasised that welfare spending must prioritise the “most vulnerable households” while phasing out inefficient and politically influenced cash transfers. Maintaining a credible, transparent, and verifiable Aswesuma registry has thus become both a social and fiscal condition tied to continued international support.

During parliamentary discussions, lawmakers raised concerns about the fairness of the selection process and proposed the formation of village-level committees to identify deserving families. They also called for public display of beneficiary lists to enhance accountability and reduce political interference.

Officials from the Finance Ministry and Divisional Secretariats admitted that communication lapses and poor coordination among field officers particularly Grama Niladharis—had contributed to implementation delays and confusion. They assured that corrective measures were being taken, including training programs and clearer role definitions for officers involved in the program’s rollout.

The World Bank’s latest country update highlighted that while poverty levels are expected to decline slightly this year, 22% of Sri Lankans still live below the poverty line, with another 10% hovering just above it. Malnutrition and low wage growth remain serious concerns.

As Sri Lanka navigates its post-crisis recovery, effective reform of Aswesuma has become a litmus test for balancing IMF-driven fiscal discipline with social protection for the poor, making the accuracy and integrity of its welfare database more crucial than ever.

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Sri Lanka’s Free Visa Plan Stalled amid Legal Turmoil

Sri Lanka’s long-promised visa-free travel scheme for 33 additional countries has been hit by fresh delays, revealing deeper issues in policy consistency, administrative inefficiency, and questionable deals involving the country’s visa processing system. The scheme intended to expand visa-free entry to 40 nations to boost tourism has been stalled for months as the Attorney General’s Department examines lingering legal complications tied to a controversial private visa management deal.

Tourism and Foreign Affairs Minister Vijitha Herath admitted this week that implementation remains pending “until the Attorney General provides clearance,” citing unresolved legal questions about revenue sharing and system management. “We have to submit a new gazette to Parliament, and we expect to finalize the process within one or two months,” he told reporters at the weekly Cabinet briefing.

However, the Attorney General’s review reportedly stems from an ongoing case related to a deal signed last year with VFS, IVS, and GBS, private firms contracted to handle online visa applications. The contract was later suspended by court in August 2024 following allegations of inflated fees, lack of transparency, and non-remittance of state revenue. A special audit by the Auditor General found that portions of income due to the Treasury had not been properly accounted for under the system, raising questions about oversight and governance.

The controversy has complicated the government’s efforts to relaunch a clean, transparent visa process. Prior to the VFS arrangement, visa fees had already been increased sharply, drawing criticism from tourism operators who said higher costs discouraged short-term travelers.

Under the proposed new free-visa system, only citizens of China, India, Indonesia, Japan, Malaysia, Russia, and Thailand currently enjoy exemption from the Electronic Travel Authorization (ETA) fee. The government announced in July 2025 that it would expand this list to include 33 more countries, mainly in Europe and the Middle East. Yet, months later, tourists from those nations still face standard visa fees.

Industry experts warn that the delay undermines Sri Lanka’s competitiveness as a destination in a region where rivals like Thailand, Malaysia, and the Maldives have aggressively eased entry requirements to capture post-pandemic travel demand. “At a time when every dollar counts, the delay in implementing a zero-fee visa system is costing us tourists and revenue,” a senior tourism official told this paper.

The prolonged legal and policy confusion also highlights the government’s mixed signals on foreign investment and public-private partnerships. Analysts argue that the failure to swiftly resolve the visa outsourcing scandal has created uncertainty across agencies.

As Sri Lanka battles to revive its crisis-hit economy, the free visa plan originally pitched as a quick win to attract foreign exchange is now emblematic of policy paralysis and bureaucratic inertia. Until the government restores clarity and accountability in its visa policy, the promised tourism revival may remain trapped in paperwork.

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Government Acts to Save Historic Nuwara Eliya Post Office

The Government has launched an urgent initiative to conserve and restore the 130-year-old Nuwara Eliya Post Office, one of Sri Lanka’s most iconic colonial-era landmarks, amid growing public concern over its deteriorating condition and past attempts to convert it into a private tourist hotel.

A special inter-agency meeting chaired by Health and Mass Media Minister Dr. Nalinda Jayatissa was held recently to review progress on the restoration and conservation plan. The meeting brought together representatives from the Department of Posts, Sri Lanka Tourism Development Authority (SLTDA), Department of Archaeology, Department of Buildings, Sri Lanka Navy, and other government bodies.

The discussions centred on preserving the post office’s architectural and historical integrity while upgrading its infrastructure to serve both postal operations and tourism. Built in 1894 during the British colonial era, the red-brick post office situated at the heart of Nuwara Eliya—is a beloved symbol of the town’s old-world charm and a favourite subject among local and foreign visitors alike.

The previous government’s proposal to hand over the property to a private developer had triggered widespread criticism from heritage conservationists, postal unions, and residents who feared the loss of public ownership and cultural authenticity. The current administration has firmly rejected privatisation, stating that the landmark will remain under the Department of Posts and instead be developed as a state-managed heritage attraction.

Officials at the meeting highlighted that the roof of the post office is severely damaged, causing rainwater leaks that have disrupted postal operations and damaged parts of the building. Restoration of the roof has been identified as the top priority, followed by structural reinforcements, façade preservation, and interior refurbishments—all to be carried out under strict heritage conservation guidelines.

The Department of Archaeology and Department of Buildings have been tasked with preparing preliminary renovation plans, while the Sri Lanka Navy has offered technical and logistical support for the conservation project. Dr. Jayatissa instructed officials to expedite the process, ensuring that authentic materials and designs are used to maintain the building’s historic value.

Heritage experts stress that restoring the Nuwara Eliya Post Office is not only about preserving a structure but also about protecting a national symbol of Sri Lanka’s postal history and colonial architecture. The government’s decision to retain public ownership and promote the site as a heritage tourism attraction aligns with global trends of adaptive reuse where historical buildings are modernised without compromising authenticity.

Once renovations are complete, the restored post office is expected to become a flagship attraction in Nuwara Eliya’s heritage tourism circuit, balancing functionality with cultural preservation and reinforcing Sri Lanka’s commitment to safeguarding its architectural legacy.

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Sri Lanka Faces Sharp Vehicle Price Hike with New 15 percent Tax

Sri Lanka is facing a complex crossroads in its automobile import policy that could significantly alter the country’s economic landscape. 

The Vehicle Importers Association of Sri Lanka (VIASL), led by Chairman Prasad Manage, has warned that vehicle prices across the board may “increase beyond affordable limits” if the government proceeds with a proposed 15 per cent tax on vehicle imports after the 2026 Budget. 

At the heart of the issue is the removal of an import-valuation discount: currently, duties and taxes are applied to only 85 per cent of a vehicle’s export-country value because importers receive a 15 per cent deduction. 

Manage says this concession has been in place since 2015, and that the government may remove it, which would immediately trigger steep price increases even for modest models.

Manage’s comments highlight how import duties are computed: based on the vehicle’s value in the exporting country after deducting all consumable taxes. If the 15 per cent deduction disappears, that higher base will translate into higher duty and tax bills. 

For instance, a compact Suzuki Wagon R might see its price hike by about Rs 400,000, while a high-end Toyota Land Cruiser could jump by at least Rs 3 million. 

The proposed tax reform also reportedly intends to unify the duty structure for brand-new and used-vehicle imports, which would have knock-on effects across the market in terms of pricing, demand, and foreign-exchange outflows.

From a macro-economic perspective the push and pull is significant. On one side, vehicle import duties have become a meaningful source of tax revenue: in 2025, the Sri Lanka Customs collected approximately Rs 165 billion (about US$ 550 million) from vehicle import taxes by mid-June, with the expectation of about Rs 450 billion for the full year. 

According to analysts from BMI Research/Fitch, tax revenue from vehicle imports could contribute roughly 1.8 per cent of GDP in 2025up from 1.3 per cent in 2019. 

On the flip side, however, the easing of vehicle import restrictions since early 2025 has triggered a rapid escalation in foreign-exchange outflows. In just five months after the ban was lifted, vehicles accounted for about US$ 742 million in letters of credit (LCs). 

The government and central bank have raised alarms that such outflows risk depleting foreign-exchange reserves and endangering imports of fuel and other essentials. 

The tension is palpable: the state needs additional tax revenue to meet fiscal targets—under the International Monetary Fund-supported reform programme, revenue mobilization is considered critical for debt sustainability. 

But at the same time, the outflow of foreign currency associated with vehicle imports threatens macro-economic stability. The government and regulators are reportedly planning tighter monitoring mechanisms to control the pace of vehicle imports and ensure that foreign-exchange drain remains within manageable bounds.

Moreover, critics argue that relying so heavily on border taxes especially on vehicles, a luxury consumption category raises questions about equity, competitiveness, and long-term industrial policy. The reform appears to be a delicate balancing act: increasing duties and taxes to raise revenue and slow import-driven FX outflows, while avoiding a sharp contraction in demand or a surge in unofficial channels.

For buyers and the auto-industry alike, the implications are immediate: higher vehicle prices, uncertainty about future import regulations, and potential shifts in consumption patterns. For the economy, the broader consequences hinge on whether policies are calibrated to protect foreign reserves, maintain fiscal momentum, and yet not stifle legitimate domestic demand and investment in the auto sector. As the Budget 2026 deliberations approach, all eyes will be on how the government rationalizes the vehicle import tax regime, the valuation discount, and the dual imperatives of revenue generation and FX conservation.

 
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Government to recruit 8,547 to state sector

The Cabinet of Ministers granted approval to the resolution furnished by the Prime Minister to grant approval to the relevant Departments and institutions

under each Ministry to recruit 8,547 persons to fill the vacancies in them.

Approval of the Cabinet of Ministers had been granted at their meeting held on 30.12.2024 to appoint a committee comprising officials headed by the Secretary to the Prime Minister to take necessary actions in regard to the number of recruitments to be made essentially after identifying requirements, priorities and time frames by reviewing the process of recruitment to the government service.

Considering the requests forwarded to the said committee for filling the vacancies in the posts existing in departments and other institutions under respective Ministries, as per the recommendations made at the committee meeting held on 02-10-2025, the Cabinet of Ministers granted approval to the resolution

furnished by the Prime Minister to grant approval to the relevant Departments and institutions under each Ministry to fill the vacancies in them.

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43% of schools found with mosquito breeding sites

The highest number of dengue mosquito breeding sites in the country have been found within the school system, according to the National Dengue Control Unit (NDCU).

Dr. Prashila Samaraweera, a specialist at the NDCU, revealed that 43% of the schools inspected were identified as having active mosquito breeding grounds. The warning comes amid a surge in dengue cases across the island, exacerbated by the prevailing rainy weather conditions.

The NDCU further reported that 11 districts have now been classified as high-risk zones for dengue transmission. Public health officials are urging school administrations, parents, and local authorities to take immediate action to eliminate mosquito breeding sites, particularly in and around school premises.

(Source - newsfirst)

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Michael Kors donates $2.7M to support Sri Lanka’s school meals programme

The United Nations World Food Programme (WFP) has welcomed a US $2.7 million contribution from global fashion brand Michael Kors to strengthen Sri Lanka’s National School Meals Programme.

The support comes through the brand’s long-running “Watch Hunger Stop” campaign and will benefit WFP’s Home-Grown School Feeding (HGSF) initiative.

Earlier this month, Michael Kors announced the launch of two special-edition T-shirts made from a cotton-linen blend to support WFP. The designs feature photographs by Maxime Poiblanc of fruits and vegetables grown through WFP’s home-grown school feeding program in Sri Lanka.

The T-shirts, priced at $40, went on sale online at michaelkors.com and in select Michael Kors stores globally from October 1, 2025, with all profits donated to WFP.

In May, Kors visited WFP headquarters in Rome to express the brand’s support for the humanitarian organization and meet with Executive Director Cindy McCain and other WFP leaders about the Watch Hunger Stop initiative. The partnership between Michael Kors and WFP began in 2013, with the mission of providing nutritious school meals to children in food-insecure regions. Over the past decade, the collaboration has helped WFP deliver more than 35 million school meals.

Watch Hunger Stop focuses on supporting WFP’s home-grown school feeding program, a proven approach that empowers local farmers—many of them women—and strengthens communities while ensuring children receive nutritious meals. By connecting school caterers with local farmers, the program ensures that ingredients are sourced locally, enriching the community economy. Farmers gain a reliable income along with training and tools, while children receive the nutrition they need to grow, thrive, and stay in school.

Sri Lanka, where WFP has operated for decades, has been chosen as the first country for this new phase of support. Over the next three years, Michael Kors’ funding will enable WFP to provide daily school meals to 250,000 children and assist 1,500 farmers in supplying eggs, vegetables, and fruits across 10 districts. The support will also allow WFP to equip 30 schools with solar panels, upgraded kitchens, and improved classrooms, enhancing learning environments for more than 3,000 students.

(Source - Dailymirror)

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2 dead after consuming contents of a bottle floating on the sea

One person from a group of four has reportedly died at a fishing wadiya in Narakkaliya, Puttalam, after consuming contents of a bottle found floating on the sea, while another succumbed to the effects at Puttalam Hospital.

The remaining two victims are currently receiving treatment at the hospital.

(Source - adaderana)

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Statement Issued by the Professional Web Journalists Association

Arrests and Criminal Investigations Must Adhere Strictly to Due Process – Police Must Refrain from Publicity Stunts

The Professional Web Journalists Association firmly believes that arrests and criminal investigations must be conducted strictly in accordance with the procedure established by law.

It is our association's observation that the forced extraction of 'voice cuts' from suspects through coercion or influence after their arrest, and the subsequent release of those clips to the media and social media, occurs with the tacit approval of the Sri Lanka Police. Furthermore, such childish and unprofessional actions severely damage the image of our country's Police Department, raising serious questions and doubts about the professionalism of the investigating officers. Ultimately, this undermines public confidence in the entire criminal justice system, bringing disrepute to the whole system. Our association urges the Sri Lanka Police and other law enforcement agencies to immediately cease the release of footage of arrested suspects to the media by the police officers themselves. Finally, even though the finger is often pointed at the media and social media, we have a reasonable suspicion that in many instances, these video clips are being released by the Police Department itself. If this is the case, it is a serious offense for law enforcement agencies to propagate such footage while violating the law and professional ethics themselves.

As has been repeatedly pointed out by judges, legal experts, Police Spokespersons, senior police officials, and by the law of this country from time to time, arrest does not equate to a conviction. Our association believes that in enforcing the law, the fundamental rights of all citizens must be respected, and investigation efficiency and professionalism must be safeguarded.

Therefore, we emphatically urge the Sri Lanka Police, the Ministry of Defence, and all responsible authorities to immediately stop broadcasting such video footage without pointing fingers at the media.

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Woman Remanded For Entering Court With Fake Gun

A woman who attempted to enter the Avissawella court premises with a fake firearm has been remanded until November 4, following her appearance before the magistrate earlier today.

The suspect was apprehended yesterday (27) afternoon during routine security checks at the court entrance.

Officers discovered the imitation weapon concealed in her handbag, raising immediate concern.

According to police, the woman, a resident of East Netolpitiya, had arrived at court to attend a traffic-related hearing.

Her motives for carrying the fake firearm remain under investigation.

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Audit Exposes $1.4 Million Tax Evasion and Procedural Lapses in Sri Lanka’s e-Visa Contract

A special audit investigation into Sri Lanka’s new e-Visa system has revealed serious irregularities, including tax evasion, unregulated foreign remittances, and violations of procurement rules, raising concerns about transparency and accountability in a project meant to modernize the country’s visa process.

According to the audit report, GBS Technology Services and IVS Global-FZCO, operating under VFS VF Worldwide Holdings Ltd, failed to remit USD 1.418 million in taxes to the Inland Revenue Department. Between April and August 2024, the companies collected both the 2.5% Social Security Contribution Levy (SSCL) and 18% Value Added Tax (VAT) from applicants—totaling USD 172,970 in SSCL and USD 1,245,390 in VAT but did not pay these sums to the government.

The audit also found that the firms processed 373,991 visa applications during this period, earning at least USD 6.9 million in service fees. An additional USD 1.82 million was generated from 98,401 visa-exempt applications countries that were granted free visas under a government tourism promotion scheme. Despite the exemption, travelers were still charged USD 18.50 per application, a move auditors described as “unjustified and exploitative.”

Under the former Electronic Travel Authorization (ETA) system, there was no service fee, and an approved upgrade proposal had recommended only a USD 1 charge. The sharp increase to USD 18.50, even for tourists and business travelers meant to be encouraged under promotional initiatives, has drawn criticism from both tourism and legal experts, who question how the decision was authorized.

The audit further exposes procedural violations in the award of the e-Visa contract. Both the Committee on Public Finance (COPF) and the audit report note that VFS Global and its affiliates were appointed without competitive bidding or adherence to government procurement regulations. This not only deprived the Department of Immigration and Emigration of cost-effective alternatives but also undermined transparency in the awarding process.

Adding to the controversy, the report reveals that visa revenues were transferred directly to foreign bank accounts controlled by the service providers, bypassing official government financial channels. This has made it impossible for authorities to verify the actual revenue collected from visa applications, creating significant gaps in state oversight.

Auditors concluded that the Department of Immigration and Emigration lacked full visibility over the project’s financial operations, leaving public funds vulnerable to misappropriation.

The revelations have sparked renewed calls for a full parliamentary inquiry and for the suspension of the e-Visa contract until accountability is established. Critics argue that such opaque deals erode investor confidence and damage Sri Lanka’s international reputation at a time when transparent governance is vital for economic recovery.

The audit’s findings now put pressure on the Finance Ministry and the Attorney General’s Department to take swift legal and administrative action to recover lost revenue and restore public trust in state-managed digital systems.

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