The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Finance and Planning

¶ 01 Hon. Speaker, on behalf of the Prime Minister and the Minister of Education, Higher Education and Vocational Education, I move the following:

¶ 02 “That the Regulations made by the Minister of Finance, Planning and Economic Development under Section 20 read with Sections 4(1) and 14 of the Imports and Exports (Control) Act, No. 1 of 1969, as amended by Acts No. 48 of 1985 and No. 28 of 1987, and published in Gazette Extraordinary No. 2481/02 dated 23 March 2026, and laid on the Table on 2026.05.05, be approved. (Cabinet approval has been granted.)”

¶ 03 In addition, I table: - Item No. 2 – Regulations (No. 2) under the Imports and Exports (Control) Act - Item No. 3 – Regulations (No. 3) under the Imports and Exports (Control) Act - Items 4 to 12 – Resolutions under the Excise Ordinance

¶ 04 Hon. Speaker, today we submit for Parliamentary approval three sets of Regulations made under the Imports and Exports (Control) Act, No. 1 of 1969, bearing 2026 Nos. 01, 02 and 03.

¶ 05 First, Regulations No. 01 published in Gazette Extraordinary No. 2481/02 of 23 March 2026. The focus is to streamline the use of Integrated Classification Codes for imports to facilitate import processes and the administration of the Customs Department. Notably, previously all used/retreaded tyres were categorized under a single code. Given the specific requirements, particularly tyres used by SriLankan Airlines differ by specifications, we have created a special sub-code for them.

¶ 06 Second, Regulations No. 02 published in Gazette Extraordinary No. 2482/08. These address several tariff-line classifications and clarify import licensing requirements. For instance, two different “thippili” items used respectively in pepper trade and in Ayurvedic preparations had been under a single code. We separate them now and remove import control restrictions for the Ayurvedic-use thippili. We also assign proper codes for items such as salt and printing machinery to facilitate correct import treatment.

¶ 07 Third, Regulations No. 03 published in Gazette Extraordinary No. 2482/12 concerning import licences for rice. While rice imports are generally restricted, these regulations set defined licence periods and arrival windows for specified quantities needed to address particular market requirements.

¶ 08 I must also note our coordination with the Customs Department. International coding standards exist for import administration; we adopt HS (Harmonized System) codes, introducing national sub-codes where necessary to improve revenue collection and administrative efficiency. This also enhances compliance and risk management in customs operations. Through proper valuation, we aim to improve duty collection efficiency and reduce evasion, while deploying technology to strengthen process compliance and risk mitigation.

¶ 09 Recently, the Customs Department introduced three technological systems: - A cargo flow system to automate examination scheduling based on arrival time slots, removing discretionary delays. - E-recovery of vessel service charges to consolidate multiple small payments into a single-point e-settlement for cargo/vessel-related charges. - A remittance portal to reconcile foreign currency outflows with corresponding import transactions across institutions, removing legal and procedural bottlenecks to information-sharing.

¶ 10 On fiscal performance, due to restored macro-stability, Customs revenue collection over the last four months is significant. Against the full-year 2026 target of Rs. 2,206.1 billion, as at 18 May 2026, Rs. 1,020.5 billion has been collected — 46.2% of the annual target and about 120% of the period target. We expect these regulations to further enhance trade facilitation and efficiency.

¶ 11 There has been debate focusing narrowly on the exchange rate increase as indicative of an overall economic crisis. The exchange rate is only one indicator. We continue to manage the external sector prudently, build reserves, and address pressures largely arising from external rather than domestic causes. Comparisons with 2022 overlook that that crisis was driven by poor policies and management, leading to import bans and debt service suspension; the exchange rate overshoot then was a symptom, not the root. Today, inflation is contained, fiscal stability has improved, and we are advancing reforms without stalling the economy — thus avoiding stagflation. We acknowledge pass-through effects on import prices but remain committed to inflation control.

¶ 12 Regional comparisons, such as India and Indonesia, show that currency depreciation driven by external factors does not automatically derail growth; both economies have seen record-low currency levels alongside 6.5%–7% growth. Our focus remains on debt sustainability: under our debt sustainability plan, we achieved the 2032 target already in 2026 and are reducing debt ratios in an orderly manner. Borrowing, when managed transparently with Parliamentary oversight, is not inherently wrong; mismanagement is. Advanced economies like Japan carry high debt-to-GDP without crisis due to credible management.

¶ 13 On vehicle imports, we have temporarily deferred reopening for private vehicles. Allegations circulated on social media claimed that on 15 May 4,000 vehicles — 3,500 by one company and 500 by another — were imported before tariff changes. This is false. On 15 May, 1,782 vehicles were cleared, including many small lots; some large lots were primarily motorcycles. After the tax changes, on 18 May, 9,429 vehicles were cleared. We invite any party alleging “4,000 on 15 May” to present evidence; absent prima facie material, investigations cannot proceed on speculation. As for Letters of Credit (LCs), on 15 May, US$ 23.71 million in LCs for vehicles were opened; on 18 May, US$ 17.9 million; trending down as policy takes effect. By 19 May, US$ 14.988 million. We will continue finely calibrated measures with the Central Bank to safeguard macro-stability without harming economic momentum.

¶ 14 Concerns that exchange rate movements will scare off foreign investors are not borne out by data: on 20 May, net foreign purchases in the stock market rose by Rs. 38 million, with gross buys of Rs. 778 million versus sells of Rs. 398 million, indicating rational investor assessment of returns. Our external current account was in surplus by Rs. 1.73 billion in 2025, and the first four months showed a positive trend; while a modest deficit may emerge in coming months, we will manage it without sliding into a balance of payments or economic crisis.

¶ 15 Citizens’ support is essential: decisions should be based on facts, avoiding unnecessary panic. With strengthened institutions and technology, we will meet this challenge swiftly and continue on a stable development path.

¶ 16 Thank you, Hon. Speaker.

¶ 17 Question proposed.