Category: Daily Financial Times

A Sri Lanka-Malaysia Business Council (SLMBC) delegation, led by President Marshad Barry along with Treasurer Zaharine Hameen and Executive Committee Member M.Z.M. Rushdi, recently visited Malaysia to meet with senior officials of the Islamic Tourism Centre (ITC) regarding the signing of a Memorandum of Understanding (MoU) on Islamic-friendly tourism.

The SLMBC of The Ceylon Chamber of Commerce successfully concluded a two-day Muslim-Friendly Tourism and Hospitality (MFTH) Awareness Program in collaboration with the ITC under Malaysia’s Tourism, Arts and Culture Ministry. Held in Sri Lanka, the program brought together stakeholders from the tourism and hospitality sector to strengthen awareness of the growing Muslim travel market and the opportunities it presents for Sri Lanka. Notably, this was the first program conducted by the ITC outside Malaysia.

With the global Muslim consumer market projected to reach $ 2.63 trillion by 2030, the program emphasised the importance of positioning Sri Lanka to better cater to Muslim travellers, particularly from regional markets such as Malaysia, given strong air connectivity, geographical proximity, and cultural similarities.

Following the success of the program and the positive feedback from stakeholders and participants, the SLMBC delegation visited ITC Malaysia to discuss further collaboration and to enhance the standards of Islamic-friendly tourism. The aim is to attract not only Malaysian tourists but also visitors from across the Islamic world, thereby strengthening Sri Lanka’s tourism sector.

ITC Director General Mohammad Faisal expressed his gratitude to the SLMBC for this initiative and assured his fullest support. He said that he and his team look forward to working closely with the SLMBC. Barry, in turn, conveyed his appreciation for the ITC’s support and highlighted that conducting such a program for the first time in the ITC’s history-and in Sri Lanka-was a milestone. He further noted that this initiative will help promote Sri Lanka as one of the best destinations offering Islamic-friendly tourism.

Sri Lanka’s post-crisis fiscal recovery has been achieved at a significant economic and social cost, with the gains in Government revenue and public finances yet to translate into a comparable improvement in employment, poverty and household welfare, according to Verité Research Lead Economist Raj Prabu Rajakulendran.

Addressing a forum titled ‘Navigating the New Tax Landscape Together’ organised by B.R. de Silva and Co. Chartered Accountants, Rajakulendran said Sri Lanka’s recovery had been internationally recognised largely because of improvements in fiscal indicators, particularly Government revenue, but argued that these measures alone did not capture the full impact of stabilisation on the economy and people’s livelihoods.

He said Sri Lanka’s revenue-to-GDP ratio had increased from around 8% before the crisis to about 16%, placing the country among the strongest performers in improving Government revenue following an economic crisis. He also noted that Sri Lanka ranked among the top countries in improving its primary fiscal balance, reflecting substantial progress in restoring public finances.

Recovery’s…

‘This is quite a significant achievement for Sri Lanka given that we were in such a bad crisis,’ Rajakulendran said.

However, he argued that the recovery narrative had become too narrowly focused on fiscal outcomes while overlooking the broader economic consequences of stabilisation.

Sri Lanka would only regain the level of economic output recorded in 2018 by 2027, meaning recent economic growth largely reflected the recovery of output lost during successive shocks rather than expansion beyond pre-crisis levels.

‘So all this growth that you’re seeing is simply to go back to where we were in 2018. It is not to grow the economy again,’ he said.

He said the recovery should also be assessed against employment and poverty rather than fiscal indicators alone.

Employment has fallen to its lowest level in two decades, and while businesses could close rapidly during a crisis, rebuilding productive capacity and creating jobs took considerably longer. He added that employment recovery did not form part of the IMF-supported program’s monitored targets despite its significance for households.

He also pointed to the sharp increase in poverty following the crisis, noting that while the last official poverty estimate before the crisis stood at about 11%, updated Government estimates had yet to be published and internal estimates suggested poverty could be around 30%.

‘Our recovery is good on the IMF scorecard. But is our recovery good on the human lives aspect?’ he said.

Rajakulendran questioned the use of GDP growth as the principal measure of recovery, arguing that economic expansion alone did not necessarily translate into improvements in living standards.

He said economies could record higher growth while inequality widened, employment weakened and households continued to struggle with the cost of living.

Referring to reconstruction following Cyclone Ditwah, he said rebuilding activity contributed positively to GDP even though many affected communities continued to experience economic hardship.

‘When there is a crisis, when you are rebuilding the country, you are contributing to the economy, but the rebuilding effort is simply understating the effect on human lives,’ he said.

Rajakulendran argued that policymakers should place greater emphasis on employment, wages, poverty and inequality alongside conventional macroeconomic indicators when assessing economic recovery.

Turning to taxation, Rajakulendran said the sustainability of Sri Lanka’s fiscal recovery would depend on strengthening tax administration rather than imposing further tax increases.

He noted that although Sri Lanka ranked second in South Asia by GDP per capita, it ranked only sixth in Government revenue collection, indicating that the country generated income without collecting a corresponding level of tax revenue.

‘We don’t have a rate problem. We have a collection problem,’ he said.

Rajakulendran said Sri Lanka’s corporate income tax rate of 30% was already among the highest in the region, yet collections remained comparatively weak, demonstrating the need to improve compliance, audits and administration while broadening the tax base.

He said a similar gap existed in personal income taxation, where Sri Lanka continued to collect well below the average for upper-middle-income economies despite recent improvements in taxpayer registration.

According to Rajakulendran, the expansion of the tax base remained essential to reducing the burden on existing taxpayers.

‘The burden falls on a small group of people who are paying these high taxes,’ he said.

He also argued that weak direct tax collection had resulted in excessive reliance on indirect taxes, with around half of the increase in Government revenue between 2021 and 2024 coming from value added tax.

Rajakulendran said greater dependence on VAT and other consumption taxes disproportionately affected lower-income households because they paid the same tax regardless of income. He called for a gradual shift towards greater reliance on direct taxation of income and wealth, supported by a broader taxpayer base and a more rules-based, predictable tax framework.

Using cigarette taxation as an example, Rajakulendran said the tax component of cigarette prices had declined from about 74% in 2018 to around 66% in 2025, reducing potential Government revenue by an estimated Rs. 17.3 billion.

He said restoring the earlier tax share could generate sufficient revenue to fund the Suwa Seriya ambulance service four times over, illustrating that better tax design could strengthen public finances without increasing the burden on compliant taxpayers.

Rajakulendran said taxation should ultimately support economic development rather than simply maximise Government revenue, arguing that future reforms should place greater emphasis on equity, stronger public services and improvements in living standards.

‘The end goal should really be human flourishing and economic development,’ he said.

Debt sustainability hinges on interest burden, not debt stock

Verité Research Lead Economist says debt restructuring largely deferred repayments instead of materially reducing debt servicing costs

Low borrowing costs, rather than debt stock, underpin strong sovereign credit profiles in countries such as Japan and Singapore

Earlier restructuring could have reduced the depth and duration of Sri Lanka’s economic contraction

Sri Lanka’s debt sustainability should be judged by the cost of servicing its debt rather than the size of its debt stock, with the country’s relatively high interest burden remaining one of its weakest post-crisis indicators despite completing sovereign debt restructuring.

This is according to Verité Research Lead Economist Raj Prabu Rajakulendran.

Debt sustainability…

Addressing a forum titled ‘Navigating the New Tax Landscape Together’ organised by B.R. de Silva and Co. Chartered Accountants, Rajakulendran said Sri Lanka’s fiscal recovery had been widely recognised for improvements in Government revenue and the primary fiscal balance, but argued that debt sustainability required greater attention to interest costs.

‘If we look at interest cost to GDP, which is the most important indicator, we are bottom of the list,’ he said, referring to comparisons with countries that had undergone economic crises and sovereign debt restructuring.

Rajakulendran said many countries that restructured their debt were able to reduce their interest burden significantly, whereas Sri Lanka’s restructuring had largely deferred repayments.

‘All we did was we pushed repayments in the future. It’s called kicking the can down the road. We said, ‘We have a problem now. If I just push it to 2030, my problem will be solved.’ Not really, but that’s how we did most of our work,’ he said.

He noted that Sri Lanka entered the restructuring process with a large debt stock carrying high borrowing costs, causing interest expenditure to rise sharply and making debt servicing a more important measure of sustainability than debt levels alone.

Rajakulendran argued that debt-to-GDP ratios by themselves could present a misleading picture.

Countries such as Japan and Singapore maintained debt ratios of around 200% of GDP while retaining strong sovereign credit ratings because they financed themselves at relatively low interest rates.

‘It’s not the stock of debt. If your debt can be huge, but if your interest rate is like 2%, 3%, you can pay that quite easily. The question is, can you service the debt that comes in your way? Interest cost to GDP is an important indicator,’ he said.

Rajakulendran also linked debt management to the pace of economic recovery.

Using 2018 as the benchmark for pre-crisis economic output, he said Sri Lanka would only regain that level of production by 2027 despite the current recovery in economic growth.

He contrasted Sri Lanka’s experience with countries including Ghana, Grenada and Mongolia, which he said had restructured their debt earlier, allowing them to avoid deeper economic contractions.

‘What we did was, we were too late to restructure debt. The economy suffered a lot more than what other countries did. They pre-emptively restructured debt,’ he said.

Rajakulendran said the effectiveness of debt restructuring should therefore be assessed not only by improvements in fiscal accounts but also by whether it reduced debt servicing costs and supported a quicker return to sustainable economic growth.

Are Loan Sharks the beneficiaries?

The Central Bank of Sri Lanka’s newly imposed Direction No. 2 of 2026 on gold-backed lending has stirred significant debate across the financial sector and wider society. The directive, which mandates a maximum Loan-to-Value (LTV) ratio of 70% for gold loans and pawning facilities offered by banks and licensed finance companies (LFCs), aims to strengthen prudential risk management. Yet, industry stakeholders warn that the measure is creating unintended hardships for households, entrepreneurs, and the jewellery trade.

Gold as lifeline

Gold has long been regarded as Sri Lanka’s most liquid asset after cash. Beyond its cultural and sentimental value-particularly among Tamil communities where gold jewellery is deeply tied to tradition-it serves as a critical financial buffer. Families routinely pledge jewellery to meet short-term cash needs, ranging from household expenses and medical emergencies to small business funding, agriculture, construction, tourism ventures, and working capital requirements.

Industry data highlights the scale of reliance on gold-backed credit:

Over 60% of household gold jewellery is believed to be pledged under gold loan/ pawning facilities.

Licensed finance companies maintain gold loan portfolios exceeding Rs. 500 billion as of 31 March 2026, with annual growth of Rs. 150 billion compared to the previous year.

More than 50% of loans are granted for consumption purposes.

Approximately 60% of gold loan facilities are short-term loans with maturities of one to three months.

Banks have increasingly introduced short-term gold loan products to compete with LFCs.

During recent periods of rising gold prices, institutions granted facilities at 80-90% LTV ratios, far above the new 70% cap.

Mounting pressures

The new 70% cap has disrupted this ecosystem. Customers who previously borrowed at higher ratios now face difficulties renewing short-term loans without making substantial capital repayments, often Rs. 40,000-50,000 per sovereign. Many borrowers, though able to service interest, lack the liquidity for sudden principal payments.

Consequences include:

Rising non-performing loan (NPL) ratios across the sector.

Monthly auction values of pledged jewelry nearing Rs. 3 billion, up In LFC s sharply from previous months.

A negative growth of Rs. 4 billion in LFC gold loan portfolios last month alone.

This trend risks eroding family assets of deep sentimental value, such as wedding jewellery and heirlooms. In desperation, borrowers are turning to informal moneylenders and microfinance providers charging exorbitant rates of up to 50% per annum, further compounding social and financial distress.

Informal lending surge – loan sharks

In the current economic environment, many banks and licensed finance companies are either unwilling or unable to provide timely gold-backed lending facilities to customers in need of urgent liquidity. As a result, thousands of people, driven by financial desperation, are forced to turn to informal moneylenders who charge interest rates as high as 10% per month-equivalent to 120% per annum.

Most borrowers approach these lenders believing the loan will be temporary. However, the combination of exceptionally high interest and continuing financial difficulties often makes it impossible to redeem their pledged gold. Over time, they lose valuable family assets accumulated over generations.

The principal beneficiary of this situation is the informal moneylenders and used gold buyers who profits not only from excessive interest but, in many instances, ultimately acquires the pledged gold itself. This raises an important public policy question: Is this the outcome that the State intends?

Wider economic impact

The timing of the directive has amplified its effects. Over the past four years, Sri Lankan households and SMEs have endured successive shocks:

Easter Sunday attacks

The COVID-19 pandemic

Fuel and energy crises

Sovereign debt crisis

Natural disasters

For many, gold loans remain the only accessible form of credit. Restricting LTV ratios now risks stifling entrepreneurship, discouraging investment in small and medium enterprises, and undermining financial institutions’ profitability, given their reliance on gold loan interest income.

The jewellery industry too faces headwinds, with declining demand for gold investments and valuation disputes arising from disparities between official and market prices.

Policy recommendations on gold-backed lending

Industry stakeholders are urging regulators to recalibrate the proposed policy framework governing gold-backed lending to ensure that it protects consumers while preserving access to formal credit.

The following measures are recommended:

1. Remove the proposed 70% Loan-to-Value (LTV) cap and revert to the previous framework, under which licensed banks and finance companies were permitted to make their own commercial decisions based on their individual risk assessments and credit policies.

2. Recognise the industry’s proven risk management record. For more than two years, licensed finance companies and banks have generated substantial business through gold-backed lending while managing the associated risks effectively. Institutions should therefore be allowed to determine their own lending limits, subject to prudent regulatory oversight, rather than being constrained by a uniform LTV cap.

3. Address the unintended consequences of restrictive regulation. Excessively restrictive LTV limits are likely to drive borrowers away from the regulated financial sector and into the hands of informal moneylenders and loan sharks, who often charge interest rates as high as 10% per month or more. This undermines consumer protection and increases the risk of borrowers losing their pledged gold.

4. Strengthen regulation of the informal lending sector. Greater regulatory attention should be directed towards unlicensed moneylenders who charge exorbitant interest rates and operate outside the formal financial system, rather than imposing additional restrictions on licensed and regulated financial institutions.

5. Review the valuation methodology for gold. The disparity between the gold prices recognised by the Central Bank for lending purposes and prevailing market prices should be addressed. A more market-responsive valuation framework would enable licensed institutions to provide fairer financing while maintaining prudent risk management.

The regulatory framework should strike an appropriate balance between financial stability, consumer protection, and continued access to credit. Policies that inadvertently reduce lending by licensed institutions may simply shift borrowers to the informal sector, where they face significantly higher costs and fewer legal protections.

Balancing prudence and access

If the objective of public policy is to protect vulnerable citizens while promoting financial inclusion, then greater attention must be given to ensuring that licensed banks and finance companies are able to provide accessible, affordable, and efficient gold loan facilities. Strengthening the formal financial sector’s capacity to meet this demand would reduce dependence on exploitative informal lending, protect household assets, and support broader economic stability.

While the Central Bank’s objective of mitigating systemic risk is widely acknowledged, critics argue that the current approach risks destabilising households and industries that depend on gold-backed credit. The challenge lies in striking a balance between financial stability and preserving access to a centuries-old lifeline for Sri Lankan families and businesses.

In a major step toward strengthening Sri Lanka’s renewable energy workforce, the Cabinet of Ministers has approved the construction of a new Renewable Energy Training Centre at an estimated cost of Rs. 398 million, funded through local resources.

The decision follows a Memorandum of Understanding (MoU) signed on 10 February 2025, between the Sri Lanka-German Technical Training Institute (SLGTI) and the Sri Lanka Sustainable Energy Authority (SLSEA) to jointly implement the project.

Govt. to set up…

Addressing the media, Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said yesterday, the new facility will be established as an affiliated branch of the SLGTI on 3.11 acres of land in the Mayurapura Division of the Walawa Zone, owned by the Sri Lanka Mahaweli Authority.

Strategically located near the Kiriebbanwewa Solar Power Plant and the Hambantota Training Centre of the SLSEA, the centre is expected to provide students with direct access to practical, hands-on training alongside classroom instruction.

He said the project aims to establish a national renewable energy training hub by integrating the new centre with other relevant institutions. The training programs will cover key areas including solar energy, wind power, hydropower, biomass energy, energy efficiency, as well as electrical, electronic, and mechanical engineering related to the renewable energy sector.

The Government expects the initiative to help address the growing demand for skilled technicians and technical professionals, as Sri Lanka accelerates its transition towards clean and sustainable energy solutions.

‘The new training centre is expected to play a vital role in developing a highly skilled workforce capable of supporting the country’s expanding renewable energy industry, while contributing to the long-term energy security and sustainability goals,’ he added.

The proposal to this effect was submitted by Prime Minister Dr. Harini Amarasuriya, in her capacity as the Education, Higher Education, and Vocational Education Minister.

A high-level committee headed by Justice and National Integration Minister Harshana Nanayakkara has been appointed to investigate the recent Mahara Prison unrest, address prison overcrowding, expedite Government Analyst reports and strengthen prison security.

The committee has also been tasked with investigating whether the violence in Negombo and Mahara prisons was part of an organised attempt to sabotage the prison network.

Making a special statement in Parliament yesterday, Nanayakkara said the committee comprises Public Security Minister Ananda Wijepala, senior ministry secretaries, and representatives of the Police, the Government Analyst’s Department and the Attorney General’s Department.

He said the committee has also been tasked with recommending measures to improve prison security and prevent similar incidents from spreading to other prisons.

Nanayakkara alleged that the scale and nature of the violence indicated it was not spontaneous but a coordinated operation aimed at causing extensive damage to prison infrastructure.

‘It is clear that the intention of those who carried out these acts was to sabotage Mahara Prison. If there are organised conspirators behind this incident, we will not hesitate to take action against them. Necessary action will be taken,’ he told Parliament.

Nanayakkara, who gave a detailed account of the Mahara Prison riots, stressed that the Mahara incident was fundamentally different from the recent unrest at Negombo Prison, which authorities have attributed to a dispute over drugs among inmates.

‘In Negombo, prison officials were able to identify the cause as a dispute between inmates. However, in Mahara, investigations have so far found nothing similar that could have triggered such widespread violence,’ he said.

He said that when disputes arise among inmates, three or four people might join in, but during the Mahara Prison riots, nearly a thousand inmates acted together, and the scale of the destruction was massive.

Appealing to the families of inmates, Nanayakkara urged them to discourage their relatives from engaging in such acts, noting that the damaged prison infrastructure had been built with public funds and would have to be rebuilt using taxpayers’ money.

‘The parents of these inmates should understand that these buildings were destroyed with taxpayers’ money and will have to be rebuilt using taxpayers’ money,’ he said, adding that only a small group of inmates was responsible for instigating the violence.

He also said the Government was currently working to improve prison facilities and expedite Government Analyst reports, urging inmates not to forfeit their welfare benefits through acts of violence.

The Minister revealed that authorities had received intelligence regarding similar incidents that could occur in two or three other prisons, and that prison authorities had already been alerted while security had been strengthened.

‘We have established the necessary coordination to control any situation that may arise and to minimise the loss of life under any circumstances,’ he assured. (SS)

Two five-star ASEAN NCAP-rated models broaden Perodua’s offering with fuel-efficient, practical mobility for Sri Lankan families and businesses Unimo Enterprises Ltd., a fully owned subsidiary of United Motors Lanka PLC and the authorised distributor for Perodua vehicles in Sri Lanka, officially unveiled the all-new Perodua Traz and Perodua Alza at Cinnamon Lakeside, Colombo. The introduction of the five-seater Traz SUV and seven-seater Alza MPV expands Perodua’s local portfolio with two distinct mobility solutions designed around, high efficiency, safety, comfort and everyday practicality and affordable price.

The launch brought together representatives of Perodua Malaysia, the leadership of United Motors Lanka PLC and Unimo Enterprises Ltd., corporate partners, financial institutions, customers, media and other industry stakeholders. It follows the introduction of the Ativa and Myvi to Sri Lanka and reflects Unimo Enterprises’ strategy of offering a broader range of trusted Perodua vehicles for changing customer lifestyles.

The Malaysian manufacturer recorded 359,904 vehicle registrations in 2025 in Malaysia and estimated its domestic market share at 43.9%, reinforcing the scale, customer acceptance and manufacturing experience behind the brand. In Sri Lanka, this global capability is complemented by United Motors Lanka PLC’s established automotive expertise and islandwide aftersales support.

The all-new Perodua Traz strengthens the brand’s presence in the increasingly important compact SUV segment. Its contemporary stance, spacious five-seat cabin and adaptable storage are intended for urban commuting, family travel and the varied demands of daily life. Convenience features available on the model include rear air-conditioning vents and a powered tailgate with a kick sensor, while its 1.5-litre powertrain is engineered to balance responsive everyday performance with economical operation.

Perodua reports fuel efficiency of 21.3 km/l for the Traz under the Malaysian Driving Conditions. The model also achieved a five-star ASEAN NCAP rating. ASEAN NCAP’s report identifies six airbags, Vehicle stability control, autonomous emergency braking for city, inter-urban and pedestrian scenarios, blind-spot detection, lane-departure warning, forward-collision warning, lane-keep assist and ISOFIX child-seat anchorages among the safety provisions fitted as standard across the assessed variants.

The Perodua Alza is a versatile seven-seater MPV created for customers who require genuine passenger capacity without sacrificing manoeuvrability or efficiency. Flexible seating allows the cabin to adapt between people and luggage, making it suitable for larger families, school and office travel, leisure journeys and business mobility. With the third row folded, luggage capacity increases from 137 litres to 498 litres, adding useful flexibility for daily and longer-distance travel.

Powered by a 1.5-litre Dual VVT-i engine paired with a D-CVT transmission, the Alza delivers a manufacturer-stated fuel-efficiency figure of up to 22.0 km/l under the Malaysian Driving Condition. It too carries a five-star ASEAN NCAP rating. The assessed Alza included six airbags, together with vehicle stability control, anti-lock braking, autonomous emergency braking and front and rear seatbelt reminders, providing independently evaluated reassurance for family-focused customers.

‘The arrival of the Traz and Alza marks another important step in broadening the choices available to Sri Lankan motorists. Customers today are looking beyond the initial purchase price; they want fuel efficiency that helps manage day-to-day running costs, practical space and dependable aftersales support. These two models address those needs in different yet complementary ways.To date, more than 20,000 Perodua vehicles have been sold in Sri Lanka. Since the lifting of vehicle import restrictions in 2025, we have sold close to 3,000 vehicles, clearly demonstrating the strong trust Sri Lankan customers continue to place in the brand. Supported by Perodua’s proven manufacturing capabilities and the United Motors Group’s extensive sales and service network, we are confident that the Traz and Alza will further strengthen this trust among Sri Lankan families and businesses,’ said United Motors Lanka PLC Group Chief Executive Officer and Executive Director Chanaka Yatawara.

Perodua customers are served through showrooms at Hyde Park Corner, Kandy, Kurunegala, Ratnapura and Matara. Aftersales support is available through a wider network covering Hyde Park Corner, Orugodawatta, Ratmalana, Ratnapura, Matara, Kandy, Kurunegala, Batticaloa, Anuradhapura and Jaffna. This network provides customers with access to trained technical expertise, maintenance support and genuine parts through authorised channels.

With the Axia, a fuel-efficient compact hatchback, Bezza, a spacious and economical compact sedan, Ativa, a 1,000cc turbocharged compact SUV, Myvi, a stylish and high performance hatchback, Aruz, a practical seven-seater SUV, Alza, a spacious seven-seater MPV and Traz, a versatile 1.5-litre SUV Perodua now offers a comprehensive range in Sri Lanka.

Priced from Rs. 8.8 million to Rs. 20 million, the range provides affordable and value-driven mobility solutions across multiple vehicle segments. All Perodua vehicles are backed by a comprehensive manufacturer’s warranty of five years or 150,000 kilometres, whichever occurs first, offering customers greater confidence and peace of mind.

Through this expanded portfolio, Unimo Enterprises is well positioned to meet the diverse mobility needs of individuals, families and businesses. The range reflects Perodua’s ‘Building Cars, People First’ philosophy by placing practical design, safety, efficiency and long-term ownership value at the centre of the mobility.

Customers are invited to experience the new Perodua Traz and Alza at any authorised Perodua showrooms or call 0117 565 170 for further information. As a special introductory offer, first 50 customers can own the Perodua Traz (with Body Kit) for Rs. 19,950,000/-, the Perodua Traz (without Body Kit) for Rs. 19,200,000/-, or the Perodua Alza for Rs. 19,950,000/-. (All prices are inclusive of VAT)

Pan Asia Bank yesterday said it has appointed B.D.A. Perera as Chairman and Ayodhya Iddawela Perera as Deputy Chairperson with effect from 3 August 2026, further strengthening the bank’s leadership as it continues to advance its strategic priorities and long-term growth agenda.

Perera succeeds to the role after serving on the Board since April 2021 and as Deputy Chairman and Senior Independent Director since November 2024. A respected financial services professional with over two decades of experience in the leasing and finance industry, he currently serves as Executive Director of LB Finance PLC, where he has played a pivotal role in driving business growth and strengthening operational excellence. He also serves as an Executive Director of LB Finance PLC’s subsidiary in Myanmar, LB Microfinance Myanmar Company Ltd.

Perera brings extensive expertise in asset management, finance and corporate leadership, having previously held senior positions at Commercial Leasing Company Ltd., Lanka ORIX Leasing Company PLC and Merchant Bank Bangladesh. He is an Associate Member of the Chartered Institute of Management Accountants (UK), holds a BSc (Business Administration) Special Degree from the University of Sri Jayewardenepura and has successfully completed the High Potentials Leadership Program at Harvard Business School, Boston, USA. He succeeds veteran banker Aravinda Perera, who served as Chairman of Pan Asia Bank for nine years.

Joining him in the bank’s leadership is Iddawela Perera, was appointed to the Board as an Independent Non-Executive Director in April 2026 and now assumes the role of Deputy Chairperson. Widely recognised as one of Sri Lanka’s most accomplished banking professionals, she brings more than 36 years of distinguished experience in the banking industry, both locally and internationally. Prior to joining Pan Asia Bank, she served as Managing Director of Sampath Bank PLC from July 2023 to September 2025, following a long and successful career across diverse areas of banking.

Her extensive governance experience includes serving on the Boards of Lanka Financial Services Bureau Ltd., LankaPay Ltd., National Credit Guarantee Institution Ltd., Sampath Centre Ltd., the Lanka Bankers’ Association and the Governing Board of the Institute of Bankers of Sri Lanka. She holds a Master of Business Administration from the Postgraduate Institute of Management, University of Sri Jayewardenepura, an Advanced Diploma in Management Accounting from the Chartered Institute of Management Accountants (UK), and has completed her banking studies up to Associateship level. In recognition of her contribution to the banking profession, she has also been conferred the Senior Fellowship of the Institute of Bankers of Sri Lanka.

The combined experience, strategic insight and leadership of the two well respected appointees will further strengthen the bank’s governance framework while supporting the continued execution of Pan Asia Bank’s long-term strategic priorities as it builds on its momentum in digital transformation, customer-centric innovation, sustainable finance and operational excellence.

The 10th Sri Lanka Junior Match Play Golf Championship 2026 for the Rukmini Kodagoda Trophy reaches its decisive semi-final stage today at the Royal Colombo Golf Club (RCGC), with the country’s top young golfers battling for places in tomorrow’s finals.

The Gold Division, recognised as a World Amateur Golf Ranking (WAGR) event, promises the biggest attraction of the day. In the girls’ semi-finals, Kaya Daluwatte takes on Aaraadhi Samararathne, while Kaitlyn Norton faces Deepika Ganesan in another exciting contest. The boys’ semi-finals will see leading junior Reshan Algama meet Lavidu Premarathna, with Jacob Norton taking on Adithya Weerasinghe for the remaining place in the final.

The Copper Girls’ title will be decided today, with Dinara Perera meeting Kyra Cader in the championship final. The Copper Boys’ semi-finals feature Abiman Abeywardhana against Dihen Vitharane and Usara Nugegoda facing Thisura Premaratne.

The Bronze Division will also witness keen competition as Heshanthi Gayansa meets Senumi Heetiarachchi and Dulkini Kangara takes on Ananya Kishanthan in the girls’ semi-finals. In the boys’ category, Jaeden Sathasivam faces Anusara Perera, while Yuvan Rathiskanth meets Prabagaran Thuwakaran.

The Silver Division semi-finals will see Genuli Weerakoon play Vihara Herath and Mihneli Herath face Mushfira Muzaami in the girls’ event, while Udeera Bandara meets Yogaraja Abeensh and Mohamed Adly takes on Vihanga Liyanga in the boys’ competition. With places in the finals at stake, another day of quality junior golf is expected at RCGC.

Sometimes the most powerful measure of a nation’s health isn’t the one we notice.

When conversations turn to the economy, most of us instinctively think about the rising price of groceries, the value of the rupee against the dollar, interest rates, or whether more jobs are being created. These are the figures that dominate television debates and newspaper headlines. Economists also rely on measures such as Gross Domestic Product (GDP), inflation, unemployment, exports, public debt, and foreign reserves to understand where a country is heading.

These indicators are important. They tell us whether the economy is expanding or slowing down, whether prices are stable, and whether businesses are investing with confidence. But there is another indicator that quietly captures many of these stories at once. It rarely becomes the centre of public discussion, even though it reflects the behaviour of millions of people every single day.

That indicator is taxation.

To many people, taxes are simply deductions from a salary, a payment made to the Inland Revenue Department, or an obligation that arrives once a year. But economists and policymakers often see something much bigger. They see taxes as one of the clearest mirrors of a country’s economic health. Not because governments need money, but because taxes reveal how an economy functions, how citizens behave, and how much confidence people have in their institutions.

Imagine visiting a doctor for a routine medical check-up. The doctor does not rely on a single measurement to judge your health. Your blood pressure, heart rate, cholesterol level, blood sugar, and many other readings together create a picture of your wellbeing. One number alone cannot tell the whole story. Countries are remarkably similar.

GDP tells us how much a nation produces. Inflation tells us whether prices are stable. Employment figures show whether people have opportunities to earn a living. But taxation often connects all of these measures. When businesses grow, people earn more, consumers spend more, and investments increase, governments usually collect more revenue, not because tax rates have increased, but because the economy itself has become stronger. That is why taxation is often described as the economy’s “silent report card.”

One of the most widely used measures around the world is the tax-to-GDP ratio. Although the term sounds technical, the idea is surprisingly simple. It measures how much tax a country collects compared with the total value of everything it produces in a year.

Think of it this way: Imagine two neighbouring countries with economies of exactly the same size. One country collects taxes equal to 18% of its GDP, while the other collects only 8%. The difference is not merely about money flowing into the Treasury. It suggests deeper differences in the way the two economies operate. The country with the stronger ratio is likely to have more businesses operating formally, more workers earning declared incomes, better tax administration, and higher levels of voluntary compliance. It may also have greater capacity to fund education, healthcare, infrastructure, and social protection without relying excessively on borrowing.

The country with the weaker ratio may be facing a very different reality. Large parts of its economy may remain informal. Many eligible taxpayers may remain outside the tax system. Tax administration may struggle with enforcement, while governments become increasingly dependent on debt to finance public services. This is why international organisations such as the IMF, World Bank, ADB, and OECD pay close attention to tax-to-GDP ratios. They are not merely interested in how much money governments collect. They are interested in what those numbers reveal about the strength and resilience of an economy.

For Sri Lanka, this lesson carries particular significance. In 2022, our tax-to-GDP ratio dropped to a concerning 6.7%, exposing the vulnerabilities of an underfunded State. While recent economic reforms have helped push that figure up to nearly 14.7% by early 2026, the underlying lesson from the crisis remains unchanged. It reminded us that Government cannot continuously spend more than they earn. Borrowing may provide temporary relief, but no household can survive indefinitely by relying only on loans. Nations are no different. Sustainable development ultimately depends on sustainable domestic revenue.

That does not mean collecting more taxes at any cost. A healthy tax system is not measured simply by the amount collected. It is measured by how that revenue is collected. This brings us to another equally important indicator: tax compliance.

Compliance is much more than paying taxes on time. It reflects whether people willingly register when they become liable, maintain accurate records, file correct returns, and meet their obligations without constant enforcement. In many ways, tax compliance is a measure of trust. People are generally willing to contribute when they believe the system is fair, the rules apply equally to everyone, public money is managed responsibly, and Government services improve their quality of life. When these conditions exist, paying taxes gradually becomes a normal civic responsibility rather than an unpleasant burden.

The opposite is equally true. If people believe others are avoiding taxes without consequences, or if they see waste, corruption, or unfair treatment, voluntary compliance begins to weaken. The issue is no longer about tax law. It becomes a question of confidence. This is why modern tax administrations around the world increasingly invest not only in audits and enforcement but also in education, digital services, taxpayer rights, transparency, and easier compliance. Building trust is often less expensive, and far more effective than building fear.

Taxation also tells us another important story: the size of the informal economy. Across Sri Lanka, thousands of hardworking entrepreneurs earn their living through small shops, home-based businesses, online selling, transport services, farming, and countless other activities. Many contribute enormously to the economy, but some remain outside the formal tax system.

When a large share of economic activity remains informal, governments collect less revenue, businesses compete under unequal conditions, reliable national statistics become weaker, and access to finance becomes more difficult for entrepreneurs themselves. Formalisation is therefore not simply about paying taxes; it creates opportunities. Businesses with proper records are more likely to obtain bank loans, attract investors, participate in exports, and grow into larger employers.

Perhaps the most overlooked truth is that taxes measure something that no economic formula can easily calculate. They measure the relationship between citizens and their country. Every tax return submitted on time represents confidence in a system. Every honest declaration reflects personal integrity. Every rupee collected contributes to services that benefit society as a whole, from classrooms and hospitals to roads, public transport, national security, and disaster response. Viewed this way, taxes become much more than revenue. They become an expression of shared responsibility.

Sri Lanka is now rebuilding its economy after one of the most challenging periods in its history. As reforms continue, discussions often focus on tax rates and new legislation. These debates are important, but perhaps they are not the most important conversation. The bigger question is whether we are building a tax culture founded on fairness, simplicity, transparency, and mutual trust.

This requires a shared commitment. The Government must ensure absolute transparency, fair enforcement, and visible accountability in how public funds are utilised, proving to the public that their contributions are valued. Simultaneously, citizens and businesses must embrace formalisation and honest compliance, recognising their critical role in the nation’s recovery. If more citizens willingly comply because they understand why taxes matter, and if governments continue strengthening accountability, then stronger revenue will naturally follow.

In the end, the healthiest economies are not necessarily those that collect the highest taxes. They are the ones where citizens contribute because they believe they are part of something larger than themselves.

The next time you hear economists discussing GDP growth, inflation, unemployment, or foreign reserves, remember that there is another number quietly telling its own story.

Sometimes the most revealing measure of a country’s economy is not how much wealth it creates. It is how willingly its people invest in their shared future through a tax system they trust.

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