The Hon. (Dr.) Upali Pannilage - Minister of Rural Development, Social Security and Community Empowerment

¶ 01 Hon. Presiding Member, today we take up two main items: regulations on bringing export proceeds to Sri Lanka under the Central Bank Act (2026/02), and a resolution under the Essential Public Services Act.

¶ 02 Throughout this debate some Opposition MPs tried to mischaracterize the Central Bank’s regulations regarding exports. As a responsible Government, we must encourage and energize the business community, especially exporters who bring in foreign exchange.

¶ 03 What is this regulation? It is not new. Already, exporters must repatriate their proceeds within a stipulated time—presently 180 days—with allowances to meet legitimate offshore expenses of the enterprise. After such deductions, the remaining foreign exchange must be converted into rupees within a specified period. That period, previously about three months, has been revised from time to time. Today’s regulation reduces it to one month.

¶ 04 How does this discourage business? We have focused intensely on developing exports over the last 18 months—both traditional and value-added goods, and services. In 2025, Sri Lanka earned its highest-ever export income—USD 17,250 million from goods and services. Without policies encouraging exports and entrepreneurship, how would we achieve this? We are executing a long-term plan, identifying exchange rate movements and applying measured controls to avoid crisis. We need not wait until bankruptcy or an acute crisis to act; we plan ahead.

¶ 05 There is also misinformation about taxation. These regulations do not impose any additional taxes. They solely address the timeframe for conversion after repatriation. Building unfounded hypotheses to claim extra taxes on some exports is irresponsible.

¶ 06 We recognize our efficient exporters and value their contribution. The present measure is a temporary step to manage short-term exchange rate volatility. We are not discouraging exports; we are strengthening them, providing more incentives for value-added exports.

¶ 07 On the second item—the resolution under the Essential Public Services Act—some attempt to paint this as a bogeyman. Historically, since the 1970s, this law was used against workers—e.g., the July 1980 strike where 40,000 workers were dismissed; in 2017 and 2019 during power and health sector strikes. But today’s context is different. The people have rejected the old ways at the 2024 presidential and general elections. This is a Government of the working people; we have demonstrated over recent months that the EPSA was used solely to facilitate recovery operations after the “Didva” cyclone—not to suppress workers.

¶ 08 Both the Central Bank regulation and the EPSA resolution aim to stabilize the economy and accelerate recovery. I am grateful for the time granted. I conclude.