The Hon. Major General (Rtd.) Aruna Jayasekera - Deputy Minister of Defence

¶ 01 Hon. Presiding Member, thank you for the opportunity. Today we debate three regulations issued by Gazette under the Special Commodity Levy Act to grant tax relief on the import of essential food items, a motion under the Customs Ordinance, and two orders under the Motor Traffic Act.

¶ 02 These tax relief measures have been crafted considering national economic stabilization, market competition and stability, protection of domestic production, and ensuring minimal adverse price impact. Since our government took office, our prime responsibility has been restoring economic stability with fiscal discipline. We learned from the severe instability created when, in 2020, the then government granted sweeping tax concessions on essential commodities. Those concessions deprived the Treasury of large revenues and destabilized the economy, without benefiting consumers—infamously seen in the “sugar tax fraud,” where private actors close to the then rulers reaped the benefits.

¶ 03 By contrast, our measures are based on analysis, expert input, and transparency over the last 12–14 months. Results are evident: Sri Lanka Customs recorded a historic revenue of LKR 2,510 billion by 31 December 2025, exceeding the target of LKR 2,115 billion. In the first 30 days of this year, Customs collected about LKR 175.8 billion. This came from strict enforcement, improved valuation, and a recovery in import volumes.

¶ 04 The IMF Managing Director, who met the Hon. President yesterday, acknowledged that growth has risen to above 5 percent, inflation has dropped to about 2 percent, reserves are adequate, and tax revenue performance is above expectations—a strong sign of stabilization.

¶ 05 Regarding the “Ditva” cyclone disaster, one regulation exempts from the Special Commodity Levy certain donated essential goods and equipment to help restoration under the National Emergency Services Act. We declared a state of emergency and appointed an Essential Services Commissioner General; with his concurrence, the levy exemptions were made to facilitate swift distribution to affected people, supported by proper management mechanisms.

¶ 06 Following “Ditva,” we received assistance from 35 countries, across 12 supply categories—food, household equipment, and other special items—valued at approximately LKR 3.1 billion. Around 339–340 metric tons of food were received. A special committee appointed by the President ensured that once goods arrived at airports and ports and Customs levies were waived as per the regulation, the National Disaster Relief Services Centre, via District Secretaries, distributed them promptly to affected populations. In addition to the 35 countries, five international organizations also assisted. These regulations meaningfully helped maintain essential public services and deliver relief.

¶ 07 Therefore, we recommend approval of these regulations. Thank you.