Colombo Gazette, BS/1/10, Matha Road, Mangala Path, Colombo (2025)

29/09/2025

The uncertainty regarding the consequences of VAT payments in the tea industry with the abolition of SVAT (suspended VAT) from 1st October 2025 and possible cash flow issues, drop in tea prices have sent concerns through the entire supply chain of the local tea industry.

At the tea auction in Colombo, on average 5-6 million kg of teas are sold every week. Based on current average tea auction prices the 18% VAT payment on tea sales amount to Rs. 4 billion per month.

Due to the competitive nature of the global tea industry, most tea export companies operate on low margins and will have to resort to bank borrowings to cover the additional cash flow requirements that arises from the imposition of VAT on the tea industry.

The interest component on the additional bank borrowings is estimated to be about Rs. 480 million per month or Rs 5,760 million per year. In a competitive global tea market, the VAT liabilities cannot be passed on to the foreign buyers and as a result the exporters will be compelled to pass it down the supply chain causing a negative impact on the tea auction prices. It is estimated that tea auction prices could come down by Rs. 20.00 per kg affecting the income of all tea producers especially the tea smallholder farmers numbering more than 480,000.

While respecting the government policy decision to abolish the SVAT from 1st October 2025 the tea exporters have concerns over the Inland Revenue Department (IRD) risk based VAT refund mechanism in 45 days’ as it lacks clarity and transparency. As we understand, the export companies categorized as low and medium risk companies only will be eligible for the VAT refund in 45 days. Tea Exporters Association (TEA) on number of occasions requested the IRD to include 10-15 tea export companies in their pilot project but no such opportunity was provided to learn how the proposed system works.

The export companies with more than 50% of exports only are eligible to apply for VAT refunds by the end of each month and technically it will take 75- 90 days to receive a refund from the date of payment of VAT by an exporter. At any given time IRD will hold Rs. 10-12 billion of VAT refunds due to the tea export companies affecting the financial position of tea export companies. The outstanding VAT refunds due to Tea Export companies for 2015-2025 period is over Rs. 1.3 billion and hence the tea exporters are uncertain of the IRD ability to refund the VAT in 45 days.

At present over 200 tea export companies operate at the weekly tea auction providing a very competitive demand environment that ensures best possible prices for the tea producers. Ceylon Tea gets a premium of over $ 1.00-1.50 per kg against Kenya and India due this demand environment. The SME category tea export companies account for about 20% of the annual tea export volume of the country and their operations can be seriously affected from the additional cash flow requirement. The absence of SME category could take this demand out of the auction system thus affecting the tea prices and subsequently affecting the income of tea producers.
More than 50% of the tea smallholder farmers have less than half acre of land for tea cultivation. They earn about Rs. 25,000/ per month from supply of green leaves and if they have to absorb the Rs. 5,760 million additional financial cost of the exporters due to the impact of VAT on tea industry their income could further come down affecting the living conditions of 480,000 tea farmers and their families.

Tea is the only agriculture product in Sri Lanka that has 93 % of exports and local sale component is estimated at around 7% of the production. Since tea sales are conducted on the E-platform all local tea buyers pay the 18% VAT and there is no revenue loss to the government. However, all tea purchases are subject to 18% VAT payment while all other agricultural products have been exempted from VAT. It is relevant to mention that both India and Kenya removed VAT on export of teas in 2023.

Tea Exporters Association requests the government to ensure the refund of VAT in one-month period to minimize the adverse impact on the industry by implementing a more robust mechanism using the digitalized system if it cannot exempt this vital sector from VAT payment.

29/09/2025

Japanese Prime Minister Shigeru Ishiba and Sri Lankan President Anura Kumara Dissanayake met in Tokyo on Monday and agreed that Japan will provide about 10 surveillance drones, worth about 500 million yen, to the South Asian nation's navy.

This will be Japan's first provision of defense equipment to Sri Lank under its official security assistance program.

"The stability and development of Sri Lanka, which is located at a strategic point in the Indian Ocean, is extremely important," Ishiba said at a joint press conference after the meeting.

In response, the president voiced his commitment to creating a peaceful and stable Indo-Pacific region.

The two governments also signed a plan to improve the productivity of small dairy farmers, as part of efforts to stabilize the political situation in Sri Lanka. Japan will provide 463 million yen in grant aid for equipment to ferment and dry grass. (Jiji Press)

29/09/2025

India and Sri Lanka had talks focused on food security and cooperative development, during a visit undertaken to India by the Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe.

Samarasinghe, accompanied by K.A. Vimalenthirarajah, Secretary to the Ministry of Trade, Commerce, Food Security and Cooperative Development, visited New Delhi from September 24–26, 2025, and participated in World Food India 2025.

In the course of his engagements, Samarasinghe held meetings with the Minister of Food Processing Industries of India, Shri Chirag Paswan and the Minister of State for Cooperation, Shri Murlidhar Mohol.

These discussions covered a wide spectrum of issues, including strengthening bilateral cooperation in the areas of food security, cooperative development, and capacity building, while also reviewing avenues for enhanced collaboration across other sectors of mutual interest.

During the visit the Minister also addressed the thematic session on “Food Loss and Waste as a Catalyst for Food Systems Transformation”, where he shared Sri Lanka’s perspectives and highlighted the importance of collaborative approaches in addressing challenges of food wastage, sustainability, and resilience of food systems.

In addition, the Minister met the Managing Directors of National Cooperative Export Limited (NCEL) and National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED). The discussions centered around opportunities for exports and marketing of agricultural products, capacity building, and the sharing of best practices in cooperative models, supply chain management, and commodity trading.

The Minister also interacted with eminent CEOs of leading agri-business and food companies during interactions organised by CII and PHDCCI. He also engaged with representatives of industry associations participating in World Food India-2025 on the sidelines of the event, which provided a platform to explore partnerships, investment opportunities, and technology exchanges in food processing, agriculture, and related sectors.

The Indian High Commission in Colombo said the visit reinforced the shared commitment of both countries to deepen economic cooperation and explore new avenues of partnership in food security and cooperative development.

29/09/2025

Sri Lanka informed the 69th General Conference of the IAEA held in Vienna that the country is currently exploring nuclear power as a reliable, low-carbon energy source.

The country has included nuclear power as an energy source within the base case of CEB Least Cost Long-Term Generation and Expansion Plan 2025-2044.

Delivering the national statement of Sri Lanka at this key event of the IAEA calendar, Permanent Representative of Sri Lanka to the IAEA Ambassador M R K Lenagala underscored the country’s close engagement with the IAEA since joining the Agency in 1957, and reaffirmed Sri Lanka’s unwavering support for the IAEA’s mission to accelerate and enlarge the contribution of atomic energy to peace, health and prosperity across the globe.

A briefing on the progress Sri Lanka has made in the use of nuclear applications for peaceful uses was provided, including the establishment of a Cyclotron based radio pharmaceutical proton facility to support PET scanning for cancer diagnosis on an initiative by the Sri Lanka Atomic Energy Board with the regulatory approvals from the Sri Lanka Atomic Energy Regulatory Board, National Medicines Regulatory Authority and Central Environmental Authority.

While appreciating the IAEA’s continued support and technical guidance towards the progress of Sri Lanka’s peaceful applications of nuclear science and technology including through the Technical Collaboration Projects, the Ambassador outlined several key initiatives that Sri Lanka has undertaken to strengthen the country’s nuclear infrastructure.

Reference was made to the participation of a high delegation led by the Speaker of the Sri Lanka Parliament earlier this year, in a consultative meeting with the IAEA on adherence to global nuclear security framework focused on the Physical Protection of Nuclear Material and its Amendment (CPPNM), as well as to the SLAEB’s hosting of four IAEA follow-up review missions to Sri Lanka, reflecting the country’s continuous engagement with the IAEA.

29/09/2025

Pakistan captain Salman Agha said India had "disrespected cricket" while Indian counterpart Suryakumar Yadav complained his side were denied the trophy after winning a fraught Asia Cup overshadowed by ill feeling on both sides.

The two teams did not shake hands for the third Asia Cup match running as India won a thrilling final by five wickets in Dubai on Sunday.

Suryakumar's men then refused to accept the trophy from Mohsin Naqvi, the president of the Asian Cricket Council (ACC), who is also chairman of the Pakistan Cricket Board and Pakistan interior minister.

The Indian players instead celebrated retaining their regional crown by mimicking holding a trophy.

Suryakumar told reporters: "I think this is one thing which I have never seen since I started playing cricket that the champion team is denied the trophy.

"We took the call on the ground about not taking the trophy."
The Twenty20 tournament in the UAE was the first time the Asian cricket giants had met since a deadly military conflict between the nuclear-armed neighbours in May.

Tensions had been running high after the two previous matches in the competition saw political posturing and a series of flashpoints between the two teams.

"If you tell me about the trophies, my trophies are sitting in my dressing room – all the 14 players and support staff. They are the real trophies for me," said Suryakumar.

"It appeared on the big screen that India is Asia Cup 2025 champion. It was a great journey and moment for us as a team."
The presentation ceremony was delayed for an hour before announcer Simon Doull said: "I have been informed by the ACC that the Indian cricket team will not be collecting their awards tonight. So that does conclude the post-match presentation."

Pakistan's Agha said India's actions during the tournament had been "bad for cricket".

"I think what has happened in this tournament is very disappointing," Agha told reporters.

"If they think they disrespected us by not shaking hands, then I say they disrespected cricket.

"What they did today, a good team doesn't do that. Good teams do what we have done. We waited for our medals and took them.
"It's been seen for the first time. I do not know where it will stop. What has happened in this tournament is bad for cricket."

In Sunday's final, India's third win over Pakistan in as many matches, India pace bowler Jasprit Bumrah bowled Haris Rauf for six and celebrated the dismissal with a crashing-plane gesture.
Rauf had made a similar motion in the previous meeting between the two teams, appearing to mock India's military action.
Pakistan opener Sahibzada Farhan previously mimicked a gun celebration after hitting a half-century.

- Tensions spill into cricket -

India and Pakistan only meet in cricket on neutral territory in international tournaments because of long-simmering tensions between the arch-rivals.

Both countries claimed victory in the four-day conflict in May that killed more than 70 people in missile, drone and military fire on each side.

India tagged its military action against Pakistan "Operation Sindoor", the Hindi word for vermilion, which married Hindu women wear on their foreheads.

The name was seen as a symbol of Delhi's determination to avenge those widowed in the April 22 attack in Kashmir's Pahalgam, which sparked the hostilities.
" on the games field," Prime Minister Narendra Modi wrote on X after Sunday's win.

"Outcome is the same -- India wins! Congrats to our cricketers."
Naqvi was quick to respond, saying: "If war was your measure of pride, history already records your humiliating defeats at Pakistan's hands." (AFP)

25/09/2025

President Anura Kumara Dissanayake, addressing the 80th session of the United Nations General Assembly, called for an immediate ceasefire in Gaza.

The President expressed deep concern over the ongoing humanitarian catastrophe in the Gaza Strip.

He called for an immediate ceasefire, the unhindered delivery of humanitarian aid and the release of hostages by all parties, in line with agreements reached by the United Nations and other stakeholders.

"We are deeply distressed by the ongoing catastrophe in the Gaza Strip. Gaza has been turned into an open prison full of pain and suffering, echoing with the cries of children and the innocent civilians. The United Nations Organisation and all related parties must work towards an immediate ceasefire, enable adequate humanitarian aid to these areas and to ensure the release of hostages of all parties," he said.

The President also said that Sri Lanka recognises the Palestinian people's inalienable right to their own state.

"We also believe that legal, security and humanitarian concerns of Israel and Palestinian people need to be acknowledged," he said.

Sri Lanka reiterated the importance of early implementation of the UN General Assembly resolutions regarding a two-state solution on the basis of the 1967 borders.

"The time has come for the international community to stop being a mere spectator and to move decisively to end the suffering of millions," the President said.

The President emphasized the constructive measures implemented by Sri Lanka to address the global drug issue, a multifaceted challenge impacting millions worldwide.

He urged world leaders to collaborate in advancing the global initiative aimed at eradicating the drug menace, which endangers global health, democracy, politics and the overall well-being of society. He proposed stricter enforcement of laws against traffickers, limiting their ability to migrate across borders and establishing more rehabilitation centers for drug addicts.

Turning to corruption, President Dissanayake described it as a destructive force that undermines development, democracy and social well-being while perpetuating poverty.

He noted that Sri Lanka has already embarked on this difficult but essential fight for the sake of future generations and urged all countries to embed the culture of anti-corruption within their governance.

25/09/2025

Seven Buddhist monks, including three foreigners, were killed when their cable-pulled rail car snapped and crashed down a mountainside in north-western Sri Lanka, police said Thursday.

The victims were crowded into the small makeshift cabin as they headed to meditation units atop a mountain within the vast Na Uyana forest monastery late on Wednesday night, police said.

“There were 13 monks in the car. Two managed to escape with minor injuries, but four others are in a critical condition,” a police official told AFP.

He said among the dead were monks from India, Russia and Romania.

Initial reports suggested that the cable had snapped, sending the rail car careering downhill at high speed before it jumped the track and crashed into a tree.

The monastery is located 130 kilometrers (81 miles) northeast of the capital, Colombo. (AFP)

25/09/2025

Australian Prime Minister Anthony Albanese noted the contribution made by Australians of Sri Lankan heritage.

He also said that Australia and Sri Lanka share a vision for a peaceful, secure and prosperous region.

"With so many Australians of Sri Lankan heritage contributing to our nation, I look forward to deepening our relationship even further," Albanese said following talks with President Anura Kumara Disanayake in New York.

President Anura Kumara Dissanayake held bilateral discussions with Albanese at the Permanent Mission of Sri Lanka to the United Nations in New York on the side-lines of the 80th session of the United Nations General Assembly.

President Dissanayake warmly welcomed Prime Minister Albanese before the two leaders engaged in discussions aimed at further expanding economic and trade cooperation and strengthening bilateral relations. Particular emphasis was placed on promoting tourism, as well as exploring new investment and market opportunities.

Minister of Foreign Affairs, Foreign Employment and Tourism Vijitha Herath, Sri Lanka’s Permanent Representative to the United Nations and former Chief Justice, President’s Counsel Jayantha Jayasuriya, along with senior officials of the Ministry of Foreign Affairs, were also present at the meeting.

23/09/2025

Sri Lanka reminded India on the importance of protecting shared maritime resources.

Admiral Dinesh Kumar Tripathi, Chief of the Naval Staff of the Indian Navy, paid a courtesy call on the Prime Minister of Sri Lanka, Dr. Harini Amarasuriya, at the Parliament of Sri Lanka.

The Prime Minister commended the Navy’s vital role in tackling pressing challenges such as drug smuggling, illegal fishing, and safeguarding the livelihoods of communities in the North and East.
She underscored the importance of protecting shared maritime resources and expressed interest in enhancing collaboration in joint anti-narcotics operations.

Admiral Tripathi reaffirmed India’s commitment to supporting Sri Lanka and highlighted the growing number of Sri Lankan officials receiving training in India.

After participating in the Galle Dialogue International Maritime Conference 2025, organized for the 12th time by the Sri Lanka Navy, Admiral Dinesh K. Tripathi, Chief of the Naval Staff of India, is scheduled to depart the island on September 25, 2025.

23/09/2025

The Maldives Government, at an interaction with journalists in Colombo, assured press freedom despite the introduction of a new legislation.

President Dr Mohamed Muizzu, recently, ratified the Maldives Media and Broadcasting Regulation Bill (Act No. 16/2025), bringing the legislation into effect.

The bill was passed by the People’s Majlis at its Seventh Special Session, convened on Tuesday, 16 September 2025, outside the ordinary sitting, amidst protests outside the Parliament.
The Maldives Government said that journalists cannot face prosecution or jail under the new law.

It also said that all sanctions are strictly administrative and subject to judicial review.

With its enactment, the Maldives Media Council, previously constituted under the Newspapers and Magazines Act (Act No. 47/78) and the Maldives Media Council Act (Act No. 15/2008), shall be dissolved. Similarly, the Maldives Broadcasting Commission, created under the Broadcasting Act (Act No. 16/2010), will be reconstituted as the Maldives Media and Broadcasting Commission.

Meanwhile, the Human Rights Commission of Maldives (HRCM) held a meeting to address concerns regarding the use of force toward journalists and restrictions on press freedom during the 16 September 2025 protests, as well as issues raised over provisions in the recently passed media bill in Parliament.

HRCM said the meeting was held at the request of the Maldives Journalists Association (MJA).

23/09/2025

X-Press Feeders, the former operator of the container ship X-Press Pearl, together with its insurer, have decided not to comply with an order issued by the Supreme Court of Sri Lanka to pay USD 250 million on 23 September 2025, as part of an interim USD 1 billion order.

After review, we are unable to make payment at this stage whilst we continue to seek engagements with the relevant Sri Lankan authorities, X-Press Feeders said in a statement.

“While we respect the judicial process, the ruling leaves open the possibility of additional and potentially unlimited compensation. Any payment towards the judgement could set a dangerous precedent for how maritime incidents will be resolved in the future,” said Shmuel Yoskovitz, Chief Executive Officer of X-Press Feeders. “It is vital that any compensation is substantiated, proportionate and consistent with international conventions.”
To date, over USD 170 million has been paid towards wreck removal, environmental remediation and compensation claims.

These efforts were carried out in cooperation with the Sri Lankan Government, including sourcing international expertise for clean-up operations. Claims lodged by the Sri Lankan government that have been processed and approved by the International Tanker Owners Pollution Federation (ITOPF), have been settled.

"We are deeply disappointed to learn from local reports of Sri Lankan parliament proceedings that compensation payments have not yet reached many affected communities due to delays within Sri Lanka. We share the frustrations of those impacted and remain open to providing additional direct support to community-based projects in Sri Lanka, for the benefit of the fishermen and marine environment," X-Press Feeders said.

X-Press Feeders said they are deeply concerned for the welfare of both the vessel’s Master and their agents in Sri Lanka.
"The Master has been prevented from returning home for more than four years due to a court-ordered travel ban, causing significant and prolonged distress to him and his family. Over the last four years, our local agents have continued to face repeated investigations, arrests and court proceedings for an incident which they had no decision-making role in. We seek fair treatment of the vessel’s master and local agents," X-Press Feeders said.

X-Press Feeders said they are open to direct dialogue with the relevant Sri Lankan authorities and have been actively seeking to engage with their representatives.

"We hope to achieve an outcome that is evidence-based, fair, proportionate and consistent with international practice," X-Press Feeders said.

X-Press Feeders, which was founded in Singapore in 1972, is the world’s largest independent common carrier.

23/09/2025

Sri Lanka has firmly staked its claim as South Asia’s rising innovation hub with the successful completion of Disrupt Asia 2025, a four-day celebration of innovation, entrepreneurship, and technology.

The event drew more than 100 venture capitalists from 20 countries including host Sri Lanka, strengthening regional startup networks and cross-border partnerships, signalling unprecedented global confidence in Sri Lanka's innovation potential.

The event is backed by the Ministry of Digital Economy and the Information Communication Technology Agency of Sri Lanka (ICTA), powered by Mastercard with Event partners Venture Engine, nVentures, Trace Sri Lanka and Asaya Sands, together with Strategic partners the World Bank and the United Nations Development Programme (UNDP) in Sri Lanka.

Deputy Minister of Digital Economy, Eranga Weeraratne stated, “Disrupt Asia 2025 is a catalyst for innovation to empower our youth, attract global investment, and accelerate the nation’s journey towards a thriving digital economy. The government continues to implement our national digital transformation agenda, and events such as these create the essential bridge between talented entrepreneurs and global investment opportunities, positioning Sri Lanka as the gateway for innovation throughout the region."

The four-day event series commenced with the highly anticipated Venture Engine competition organized by the Lanka Angel Network (LAN) at Cinnamon Life, Colombo. From over 160 aspiring applicants and multiple selection rounds, 12 promising startups delivered live pitches to top local angels and regional Venture Capitalists (VCs). The competition attracted prominent VCs and industry participants, creating valuable networking opportunities and opening doors for startups and attendees.

On September 18, the Main Conference at Cinnamon Life drew national and international attention, with Anura Kumara Dissanyake, the President of Sri Lanka gracing the occasion, reflecting the national importance of the initiative in driving the country's digital transformation. A notable highlight was the keynote address by Vijay Shekhar Sharma, Founder & CEO, One97 Communications and Paytm, whose insights provided a gateway to expand horizons.

Among the distinguished guests were high-level representatives from national and strategic partners of the event, the diplomatic community, corporate leaders, investors, regional startup delegations from India, Oman, Qatar, Singapore and other international delegations, demonstrating strong international support for Sri Lanka's innovation ambitions. The day unfolded with featured keynotes, panel discussions, fireside chats, and curated matchmaking sessions with Sri Lanka's top 30 startups.

A special highlight was Mastercard’s collaboration as Title Partner for Disrupt Asia 2025. Sandun Hapugoda, Country Manager, Sri Lanka and Maldives, Mastercard noted, "Mastercard is delighted to collaborate for Disrupt Asia 2025, a pivotal platform that champions digital innovation and entrepreneurship in Sri Lanka. The presence of over 100 venture capitalists and thousands of entrepreneurs is a powerful testament to the vibrancy and potential of the country’s startup ecosystem. By connecting local innovators with global networks, expertise, and investment, Mastercard is helping to catalyze a future-ready digital economy—one that fosters inclusive growth, unlocks new opportunities, and positions Sri Lanka as a hub for tech-driven transformation.”

The agenda featured a compelling session on Angel Investment, delivered by Israel Pons, Board Director, Global Business Angels Network and Marcel Dridje, Board Member, European Business Angels. Their global expertise illuminated the latest investment trends and inspired a new wave of angel backing for regional startups.

On September 19, the Innovation Festival at Trace Expert City brought the startup ecosystem to the public, showcasing a vibrant celebration of creativity and entrepreneurship. Inaugurated by Mahesh Uttamchandani from the World Bank and Eranga Weerarathna, Deputy Minister, Digital Economy, alongside distinguished guests including Dr. Sumeet Jarangal, Director, Department for Promotion of Industry and Internal Trade (DPIIT) .
As part of the Disrupt Asia international engagement, a curated sundowner event will be held to focus on world class Sri Lankan brands in a unique cultural showcase.

With over 5,000 attendees including students, industry professionals, and families, the festival became one of Sri Lanka’s largest ever technology gatherings. Over 50 local and international startups showcased alongside tech pavilions, workshops, and discussions, creating an immersive experience that connected the startup ecosystem with a broader community audience.

Disrupt Asia 2025 will be remembered as a turning point in strengthening Sri Lanka's global reputation in the startup and innovation space, creating lasting partnerships and demonstrating the country's readiness to lead South Asia's innovation revolution.

Colombo Gazette

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