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Sri Lanka’s push to introduce a comprehensive property tax by 2027 faces significant uncertainty as the government struggles to build the digital land-ownership infrastructure required under the IMF Extended Fund Facility.

The initiativeintended to modernise property valuation, improve tax administration and widen the fiscal basehas become entangled in administrative delays and political baggage linked to the National People's Power (NPP) government’s past resistance to similar reforms.

Treasury Secretary Dr. Harshana Suriyapperuma recently emphasised that the foundation of the forthcoming property tax must be a fully digitised property database.

The system is expected to capture detailed information including property valuations, ownership structures, types, distribution and other key descriptors essential for reliable taxation. “We need a database that gives the administration reliable information,” he said at a public forum.

While stressing the importance of the property tax, Dr. Suriyapperuma noted that the government would initially focus on broadening the current fiscal base through other revenue channels. Taxes on imported motor vehicles remain a major state income source, while SMEs are supported through nearly Rs. 80 billion in budgetary financing facilities aimed at strengthening their profitability and ultimately their tax contribution.

However, experts argue that Sri Lanka is already behind schedule. A study by Verité Research and Prof. Mick Moore highlighted that more than two years have passed since the IMF agreement obligated Sri Lanka to introduce a property tax. Although the Valuation Department is digitising its records and building a Sales Price and Rents Register, progress remains slow, leaving serious doubts about the timeline.

Prof. Moore warned that the current manual valuation process dependent on site inspections—is inefficient, expensive and highly vulnerable to manipulation. He urged the adoption of widely used digital technologies capable of generating mass, fair and low-cost property valuations.

The broader issue, analysts point out, is not only technical. Political resistance to external funding and digitisation in the past including the NPP’s strong opposition to the Millennium Challenge Corporation (MCC) land component while in opposition cost Sri Lanka a US$480 million grant that would have funded precisely this type of land-administration modernisation. The same digitisation work now must be funded domestically under tighter fiscal constraints.

With IMF deadlines approaching, Sri Lanka risks repeating history: rejecting internationally funded modernisation when offered, then being forced to implement the same reforms later under economic stress. Unless the government accelerates the digital land-data programme, the country may face delays in introducing the property tax—along with the continued loss of revenue urgently required for economic recovery

The Central Bank of Sri Lanka (CBSL) has chosen to keep the Overnight Policy Rate (OPR) steady at 7.75%, following the latest meeting of the Monetary Policy Board held yesterday (25).

According to the CBSL, the decision was based on a careful review of domestic and international economic conditions. The Board believes the existing monetary policy settings remain suitable for directing inflation toward the long-term target of 5%.

Headline inflation, measured by the Colombo Consumer Price Index (CCPI), rose for the third straight month in October. However, the Central Bank expects inflation to increase at a slower pace than previously anticipated and gradually align with the target by the second half of 2026.

Core inflation is also projected to rise moderately as economic activity strengthens. The Central Bank noted that medium-term inflation expectations continue to stay firmly anchored around the target.

Additionally, leading indicators show ongoing economic momentum, with private sector credit posting broad-based growth so far in 2025, aided by the relatively low-interest-rate environment.

The CBSL stated that it will keep a close watch on both global and local economic trends and is ready to adjust policies if necessary to ensure inflation remains stable and the economy continues on a sustainable growth path.

Sri Lanka’s Colombo Port recorded a 6.7% increase in container volumes during the first nine months of 2025, reaching nearly 6.2 million TEUs compared with 5.8 million TEUs a year earlier. Although the numbers point to continued recovery, exporters warn that recurring vessel omissions and operational lapses threaten the port’s reliability and competitiveness.

According to Central Bank data, September throughput rose 14.4% year-on-year to 742,116 TEUs. However, month-on-month growth was minimal at 0.13%, suggesting that capacity constraints and yard congestion are emerging.

Transshipment cargo, which accounts for nearly 80% of Colombo’s operations, expanded 4.8% to 4.94 million TEUs during the nine-month period. September also saw a 13.1% annual increase in transshipment volumes, though activity dipped compared to August.

Domestic handling rose 13.6% to 971,875 TEUs, reflecting stronger import and export movements. Re-stowing operations posted the fastest growth, up 20% year-on-year to 267,231 TEUs, with September recording a sharp 42.4% annual increase.

Vessel traffic across Colombo, Galle, Trincomalee and Hambantota increased 12.6% to 3,792 ships in the January–September period. September recorded 457 calls, almost 20% higher than the previous year.

Despite this growth, exporters have expressed concern about operational disruptions. The Free Trade Zone Manufacturers’ Association (FTZMA), in a letter to Ports and Civil Aviation Minister Anura Karunathilaka, warned that recurring vessel omissions in recent months have led to shortages of raw materials, production delays and missed export deadlines. Industries that depend on precise shipping schedules, such as apparel, electronics and rubber-based manufacturing, have been most affected.

The Government, however, maintains that reforms are underway. In the 2026 Budget, President and Finance Minister Anura Kumara Dissanayake announced several key initiatives, including Phase II of the Western Container Terminal with ADB support, feasibility studies for Port Logistics Centres with the World Bank and preliminary work for the Colombo North Port Development Project.

The Budget also outlined new trade-facilitation infrastructure, such as the Kerawalapitiya Customs Verification Centre and logistics facilities in Bloemendal. Digitalisation initiatives, including the Port Community System, are being scaled up to improve data integration and turnaround times.

The FTZMA has urged authorities to address immediate operational shortcomings by improving yard efficiency, speeding inter-terminal transfers, strengthening road access and expediting the commissioning of the East and West Container Terminals. Exporters insist that clearer communication and collaborative action are necessary to stabilise port operations and restore confidence.

The National Building Research Organisation (NBRO) has placed several areas in the Kandy and Nuwara Eliya districts under a Level 3 (Red) landslide evacuation alert, the highest warning issued during severe risk conditions.

The notice, effective from 8:00 a.m. today  until 8:00 p.m. tomorrow , calls on residents in vulnerable zones to evacuate immediately and remain in safe areas until conditions improve.In the Kandy district, the warning covers the Udadumbara Divisional Secretariat Division (DSD) and surrounding localities. Meanwhile, in the Nuwara Eliya district, the alert applies to the Walapane, Nildandhahinna, Mathurata, and Hanguranketha DSDs and their nearby areas. Authorities advise residents to stay alert and follow official safety instructions closely.

The Department of Meteorology reports that the low-pressure system over the southwest Bay of Bengal, positioned south of Sri Lanka around midnight, is likely to strengthen into a depression within the next 30 hours.

As a result of this developing system, the island is set to face heightened rainy and windy conditions over the coming days. According to the Met Department, many areas can expect intermittent showers or thunderstorms throughout the day.

Very heavy rainfall of more than 150 mm is possible in parts of the Eastern, Central and Uva provinces, as well as the Polonnaruwa district. Other regions may also see significant rainfall, with some locations likely to receive over 100 mm.In addition, wind speeds of around 50 kmph are expected at times in the Northern, North-Central, North-Western, Western and Eastern provinces, and in the Hambantota and Matale districts. Other areas may experience fairly strong winds of about 40 kmph.

Authorities urge the public to remain cautious and take necessary measures to reduce the risk of damage from strong winds and lightning.

Sri Lanka’s Inland Revenue Department (IRD) is recording one of its strongest years in recent history, with new data showing sharp improvements in taxpayer registration, revenue mobilisation, and overall administrative performance compared to 2024. Under the current leadership, the Department has reported a significant expansion of the tax net, strengthening the country’s fiscal position amid continued economic recovery efforts.

At a media briefing organised by the Government Information Department, Senior Deputy Commissioner P. Nandana Kumara revealed that 200,000 new individual taxpayers have been added so far this year, taking the total number of registered individuals to 1.2 million. This marks one of the largest annual increases in recent years and reflects a sustained push to improve compliance and reduce tax leakages.

The Department’s 2025 performance is also supported by the formalisation of business activity. Kumara noted that the IRD has registered 18,000 new companies, a notable rise that signals growing business confidence and expanding economic activity. Alongside this, excise duty registrations have increased to 30,000, contributing to a broader diversification of revenue sources.

The new registrations have translated directly into stronger revenue outcomes. The IRD has already collected over Rs. 2 trillion as of 17 November 2025, surpassing the full-year collection for 2024 by more than Rs. 60 billion. In 2024, the IRD achieved a record Rs. 2,620 billion, building upon a recovery trend that began in 2022 after the sharp revenue contraction caused by tax cuts and the pandemic.

Sri Lanka’s tax revenue had plunged from Rs. 1,025 billion in 2019 to Rs. 523 billion in 2020, before slowly recovering to Rs. 632 billion in 2021, Rs. 1,058 billion in 2022, and Rs. 1,842 billion in 2023. The current administration has pushed these gains further, with 2025 shaping up to outperform all previous years.

According to Kumara, VAT revenue has increased by 21% compared to last year, reflecting stronger enforcement and the widening of the tax base. Income tax collection is also up 14%, supported by the rise in new registrants and tighter compliance monitoring.

These improvements come alongside a policy change that raises the personal income tax threshold from Rs. 1.2 million to Rs. 1.8 million for the 2025 assessment year. Officials argue that this adjustment provides relief to low- and middle-income earners while ensuring higher-income groups contribute more effectively.

The IRD attributes the improved performance to increased digitalisation, stricter enforcement, and targeted efforts to bring previously unregistered individuals and businesses into the tax system. Officials say the 2025 outcomes demonstrate the effectiveness of ongoing institutional reforms, positioning the Department to meetand likely exceed this year’s revenue goals.

Sri Lanka’s latest Medium-Term Debt Management Strategy (MTDS) 2026–2030 reveals a stark shift in the country’s debt risk profile. While external debt restructuring has eased immediate repayment pressure, the country is now grappling with a far more urgent threat: a heavy concentration of short-term domestic borrowing that must be refinanced within the next few years.

According to the Public Debt Management Office (PDMO), total Government debt reached Rs. 30.8 trillion by June 2025, with 64% sourced domestically and 36% externally. The debt-to-GDP ratio has stabilised at 99.1% in 2024, down from 114.2% in 2022, thanks largely to IMF-driven fiscal consolidation. But behind this improvement lies a compressed maturity structure that could threaten financial stability.

The biggest red flag is the growing stock of Treasury Bills (T-Bills), projected to reach Rs. 3.6 trillion by end-2025 all maturing in 2026. The PDMO warns that this concentration creates a “refinancing cliff” that will severely test Government cashflows. T-Bills stood at Rs. 4.09 trillion at the start of 2024 and Rs. 4.07 trillion at the beginning of 2025, requiring repeated rollovers.

Treasury Bonds (T-Bonds) dominate the long-term profile, but they too pose risks. A major maturity spike of Rs. 2.15 trillion arrives in 2028, the result of shorter-tenor borrowings issued after the 2022 economic crisis. The period between 2027 and 2033 is now heavily clustered with domestic redemptions.

Sri Lanka’s restructuring agreements with the Official Creditor Committee and China Exim Bank have significantly eased short-term pressures. Grace periods extend to 2028, interest rates have been reduced, and repayment horizons stretch to 2043. International sovereign bonds were pushed forward by roughly six years.

Yet, even with restructuring, Sri Lanka must service USD 2.45 billion in 2025, followed by USD 2.13 billion in 2026, USD 2.09 billion in 2027, and USD 3.10 billion in 2028. External risks remain heavily tied to exchange rate movements, with 37.8% of total Government debt denominated in foreign currency.

The MTDS proposes sourcing 90% of Government borrowing domestically by 2030, reducing dependency on external markets while preparing for higher post-2030 repayments. The Government plans to reopen benchmark bonds of 5, 8, 10, 12 and 15 years, introduce inflation-linked instruments, and strengthen the domestic investor base.

The PDMO is also exploring Samurai, Panda, Sukuk, and syndicated loans as alternative channels.

The report cautions that debt stability depends heavily on policy coordination. Data limitations, volatility in the exchange rate, slow market development and shallow liquidity continue to pose risks. Success will require disciplined cashflow management, longer maturities, and rebuilding investor confidence.

Former Chairman of the Sri Lanka Bureau of Foreign Employment (SLBFE), Mohammed Hilmi, has been arrested on corruption charges by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).

He was taken into custody on charges related to an alleged irregularity that occurred during the process of sending workers to Israel.

Regarding the alleged malpractice related to sending workers for jobs in Israel during the previous administration, Manusha Nanayakkara, who was the Minister of Foreign Employment at the time, was also arrested and subsequently released on bail.

The former Chairman of the SLBFE has now been arrested by the Bribery Commission in connection with the specific incident, said Ada Derana reporter.

( Source : adaderana.lk)

The Road Development Authority (RDA) says that one lane of the Kandy–Colombo main road at Pahala Kadugannawa is now open to motorists, allowing limited traffic flow through the area.

The section was completely shut down for several days after a landslide struck the site on November 22, forcing authorities to halt all vehicle movement for safety. Restoration and stabilization efforts are continuing, and officials expect further updates as work progresses.

MP Namal Rajapaksa has condemned the recent summoning of Mahinda Ileperuma, Editor-in-Chief of the Aruna newspaper, to the Criminal Investigation Department (CID), describing it as an act of media suppression and a warning to journalists nationwide.

In a statement, Rajapaksa expressed strong disapproval of what he termed an effort by political actors-who claim to oppose repressive laws—to use the CID as a tool to intimidate the press.The summons was issued in connection with a news report published under Ileperuma’s editorship, which claimed that, in addition to a Grama Niladhari certificate, a certificate from the Chairman of the Public Security Committee was also required to obtain police reports.

Rajapaksa emphasized that disputes over press content should first be addressed through established channels, such as filing a complaint with the Sri Lanka Press Council or referring the matter to the Parliamentary Privileges Committee. By bypassing these procedures, he said, the government is demonstrating its readiness to suppress independent journalism.The MP reiterated his condemnation of media intimidation, calling it “deeply regrettable” that the CID is being used to enforce narrow political objectives at the expense of press freedom.