News
Government to review politicians’ entitlements in new action plan
Entitlements to current and former politicians including the laws under which they are granted are to undergo a comprehensive assessment under a new Goverrnance Action Plan (GAP).
It has also vowed to adopt regulations requiring these benefits to be disclosed publicly each year and to subject them to regular parliamentary oversight.
The updated 2025 GAP—which is based on the International Monetary Fund’s (IMF) Sri Lanka Governance Diagnostic Assessment (GDA)—is available on the Presidential Secretariat website, whereas the 2024 GAP was on the Finance Ministry website. It contains a set of 16 “reform commitments” alongside implementation details, key milestones, and completion dates. Last year’s document made no mention of politician entitlements or benefits. The Presidential Secretariat is tasked with concluding the assessment by May this year. The relevant milestones are described as implementing the existing provisions of the President’s Entitlement Act No. 04 of 1986 and issuing circulars/guidelines to limit staff recruitment and vehicle facilities, fuel allowances and telephone allowances granted to private staff of ministers and deputy ministers. “
“Unnecessary expenditures” of the Presidential Secretariat will be restricted or cut down (by March 2025), and State-owned bungalows previously allocated to politicians will be mobilised for better public purposes.
The GAP is typically based on the IMF’s GDA, which analysed Sri Lanka’s governance practices and identified weaknesses that could lead to corruption in areas such as fiscal management, Central Bank operations, market regulation, and rule of law. It provided recommendations to improve transparency and accountability in government and was heavily corruption-focused.
The latest GAP has a new commitment to enact (by May 2025) a comprehensive Asset Recovery Law. However, it has significantly delayed an earlier deadline to finalise and implement regulations to provide beneficial ownership information (as required by the Companies Act) and to establish a public beneficial ownership registry. The 2024 GAP had said this would be done by September last year. The latest pledge is to have it in place by December this year.
Beneficial ownership transparency is crucial in preventing corruption by identifying the true owners of companies. It helps uncover crimes such as money laundering, tax evasion, and other illegal activities. Sri Lanka has consistently failed to make progress in this regard.
The new GAP says the SOE (state-owned enterprise) reform policy will be reviewed “to enhance transparency and accountability of SOE management and strategy principles to meet its key objectives”. Responsibility has been shifted from the Ministry of Finance to the Presidential Secretariat, the Department of Public Enterprises and the Department of Legal Affairs.
A committee is to be appointed to develop criteria for listing SOEs under a holding company, reviewing existing SOE policy, and providing recommendations, all by the end of this month. The results are set to be presented to the Cabinet by May 2025 with a draft SOE bill by July.
The SOE Act is expected by September this year, according to the GAP, followed by the formation of a holding company the following month and the identification of entities to be absorbed under the holding company by November 2025.
Both GAPS have made promises on the Strategic Development Projects Act (SDPA), but no milestones have been achieved so far.
The latest GAP vows to suspend SDPA application until the promulgation of “transparent, rules-based eligibility criteria to increase the accountability and effectiveness of granted tax expenditures and to limit the duration for which incentives are granted”. Responsibility for this has been moved from the Board of Investment and the Office of the President to the Ministry of Finance.
While the last administration said no further tax exemptions would be granted under the SDPA until new regulations were promulgated—but disregarded this several times—the new GAP states that proposals for “comprehensive qualitative and quantitative eligibility criteria” for SDP projects will be ready by March 2025, while the law will be amended and necessary clearances obtained by May 2025.
The IMF GDA stated that the SDPA, which grants wide-ranging tax exemptions for projects “without scrutiny”, should be abolished or suspended until structures and processes are in place to evaluate whether such incentives are effective.
The best way to say that you found the home of your dreams is by finding it on Hitad.lk. We have listings for apartments for sale or rent in Sri Lanka, no matter what locale you're looking for! Whether you live in Colombo, Galle, Kandy, Matara, Jaffna and more - we've got them all!