By Asoka S. Seneviratne –
Prof. Asoka.S. Seneviratne
“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” — Socrates
Sri Lanka’s recent fiscal history has exposed the limits of traditional taxation strategies. The period following 2024 was defined by a reliance on high, often punitive tax rates, imposed to meet immediate revenue needs amid economic crisis. While these measures may have temporarily bolstered state coffers, they were socially and economically unsustainable. The burden fell disproportionately on a narrow segment of the population, creating resentment, discouraging entrepreneurship, and accelerating the emigration of talent. Such punitive measures distort incentives, suppress productive risk-taking, and perpetuate a low-growth equilibrium. Worse, over-reliance on selective enforcement fosters a climate where compliance is driven by fear rather than civic responsibility, eroding trust between citizens and the state. The structural flaw is clear: taxation must not depend solely on high rates applied to a few; it must be broad, predictable, and equitable to sustain long-term fiscal health.
The solution lies in digital formalization, a transformative approach that leverages technology to expand the tax base, reduce discretion, and improve compliance without punitive pressure. By systematically capturing economic activity through integrated digital platforms, the government can identify discrepancies between declared income and observable lifestyles, enabling fair and precise interventions. The Revenue Administration Management Information System (RAMIS) forms the cornerstone of this effort. By linking RAMIS to banking records, vehicle registrations, property ownership, and corporate filings, the state can construct a comprehensive, real-time map of economic activity. Automated algorithms can then detect inconsistencies—such as individuals owning luxury vehicles or multiple properties but reporting low income—and issue system-generated notifications prompting voluntary regularization. This reduces the need for manual audits, raids, or discretionary enforcement, which are often prone to corruption and political bias.
Beyond detection, digital formalization introduces predictable and transparent compliance mechanisms. Citizens and businesses understand the rules, the thresholds, and the consequences, creating a voluntary compliance culture rather than one based on fear. This approach shifts the incentive structure: compliance is rewarded through clarity and fairness, while non-compliance is addressed automatically through objective, rule-based interventions. Over time, this fosters public trust in the tax system and strengthens the social contract between the state and its citizens.
The benefits are profound. By broadening the tax base, the government can rationalize rates, particularly for the middle class, maintaining or increasing revenue without overburdening any single group. Lower personal income tax rates encourage entrepreneurship, investment, and formal employment, countering the brain drain and unlocking economic potential. Simultaneously, additional revenues can be invested in essential public services, infrastructure, and growth-promoting initiatives, creating a virtuous cycle where taxation supports development rather than hindering it.
Digital formalization also aligns with broader governance reforms. When revenue collection is automated, transparent, and data-driven, it becomes a strategic tool rather than a blunt instrument of punishment. This strengthens the credibility of the government, as citizens perceive the system as impartial and efficient. By embedding fairness and predictability into the fiscal architecture, the state can gradually replace punitive, fear-driven approaches with an inclusive, sustainable model that supports long-term economic stability.
By 2026, the goal is a fully integrated digital taxation ecosystem. The successful linkage of RAMIS with key economic and financial datasets will not only broaden the tax base but also ensure that compliance becomes the natural outcome of visibility, transparency, and automation. This transformation will reduce reliance on discretionary enforcement, foster citizen trust, and generate sustainable revenue streams. Ultimately, digital formalization positions Sri Lanka to escape the cycle of reactive, crisis-driven fiscal management, laying the foundation for a modern, equitable, and growth-oriented economy where taxation supports both the state and the citizenry, creating the conditions for prosperity and fiscal sovereignty.
Navigating the Geopolitical Tug-of-War: A Stiff Backbone for Sovereignty
Sri Lanka’s strategic location in the Indian Ocean has long been both an asset and a vulnerability. Positioned along vital maritime routes, the island is central to regional trade and security, yet constantly exposed to geopolitical pressure from external powers. India, as the regional heavyweight, closely monitors developments affecting its security interests, while China views Sri Lanka as a key node in its maritime Belt and Road strategy. Navigating this competing influence demands a careful balance—welcoming engagement and investment without compromising sovereignty or policy independence.
The risks are real and consequential. Large-scale foreign-funded infrastructure, port development, energy projects, and defence cooperation are no longer purely economic decisions; they carry direct implications for national autonomy. Sri Lanka’s own experience shows that excessive dependence on any single external partner can limit policy flexibility and erode decision-making independence. When foreign involvement is poorly managed, it fuels public distrust, strengthens domestic resistance to reform, and threatens economic stability. Short-term gains can easily evolve into long-term strategic vulnerabilities if governance lacks foresight and discipline.
To avoid this trap, Sri Lanka must adopt a “stiff backbone” approach—combining firm diplomacy, strategic negotiation, and strong domestic institutions. Under President Anura Kumara Dissanayake, engagement with India, China, and other partners must be transparent and assertive, clearly signalling that cooperation is welcome but national interests are non-negotiable. Major investments should be assessed not only for financial returns but also for their impact on strategic autonomy, local employment, value addition, and national control. Critical assets such as ports, industrial zones, and energy infrastructure must retain meaningful Sri Lankan ownership, oversight, and technological participation.
Equally important is strengthening domestic capacity. Robust maritime security, intelligence coordination, and economic resilience reduce the risk that external engagement turns into external influence. When geopolitical strategy is aligned with domestic reform—industrial development, energy security, and governance modernisation—policy independence is preserved and public confidence strengthened.
In essence, safeguarding sovereignty in a contested region requires firmness, clarity, and internal strength. By maintaining a stiff backbone in its external relations, Sri Lanka can transform geopolitical pressure into strategic opportunity, ensuring that foreign partnerships support long-term national development rather than undermine it.
Transitioning from Clean Intentions to “Quick-Win” Relief
By 2026, the NPP government and President Anura Kumara Dissanayake face a critical test: citizens now expect anti-corruption efforts to translate into tangible improvements in their daily lives. While moral credibility and clean governance established political legitimacy, they cannot sustain public trust on their own. The challenge is clear—good intentions must result in visible, measurable benefits, or the momentum of reform risks stalling. Long-standing inefficiencies in public services, energy, health, and municipal administration mean that citizens continue to feel (i) the pinch of high electricity bills,(ii) inflated medicine costs, and (iii) bureaucratic delays, even as structural reforms are underway. Without rapid, citizen-visible outcomes, skeptics and entrenched interests can portray the government as ineffective, undermining credibility and slowing further reforms.
Energy reform offers the most immediate opportunity for quick, high-impact results. The unbundling of the Ceylon Electricity Board (CEB) is both a structural necessity and a means to directly benefit households and businesses. By (i) reducing inefficiencies, (ii) eliminating waste in fuel procurement, (iii) removing unnecessary intermediaries, and (iv) moving to renewable energy, the government can achieve a targeted 30 percent reduction in electricity tariffs by the third quarter of 2026. This is not just a financial relief measure; it sends a strong message that structural reform can have real effects on citizens’ living standards. Technology-driven monitoring systems, coupled with strict performance tracking, ensure transparency and prevent corruption in procurement and distribution, reinforcing the credibility of reform initiatives.
Similarly, the pharmaceutical sector represents another area where quick wins can make a tangible difference. The National Medicines Regulatory Authority’s (NMRA) digital price-monitoring portal can track retail prices of essential drugs, enforce price ceilings, and identify supply-chain inefficiencies. By ensuring that life-saving medicines for diabetes, heart disease, and other chronic conditions are accessible and affordable, citizens experience immediate improvements in their household budgets. This visibility of impact not only strengthens public trust but also demonstrates that ethical governance is directly linked to economic and social relief.
Quick-win initiatives should also extend to local governance, service delivery, and administrative reform. Fast-track permit approvals, digitized public services, and streamlined municipal operations can relieve long-standing bureaucratic bottlenecks, reduce unnecessary costs for citizens and businesses, and demonstrate the government’s capacity to act efficiently. These projects are strategically sequenced to complement broader structural reforms, reinforcing the government’s credibility while simultaneously improving operational capacity.
Another critical aspect of delivering quick wins lies in institutionalizing accountability. Every initiative must be monitored through a performance-based framework, with clear timelines and measurable outcomes. Officials responsible for delays without justification should be flagged and held accountable, while successes are recognized and scaled up. This approach gradually shifts the culture within public administration from cautious, reactive compliance to proactive, results-oriented action. Officials gain confidence in their ability to implement reforms decisively, and entrenched opposition forces find it increasingly difficult to obstruct progress.
Ultimately, transitioning from clean intentions to quick-win relief is both a strategic and political necessity. By delivering immediate, visible benefits in sectors such as energy and pharmaceuticals, the government can convert ethical credibility into tangible public trust. These rapid successes create momentum for longer-term structural reforms, demonstrating that governance can be both moral and effective. In this way, President Anura Kumara Dissanayake can solidify the link between anti-corruption measures and citizens’ welfare, reinforce public confidence, and establish a foundation for sustained, reform-driven transformation across Sri Lanka’s economy and society.
The Presidential Delivery Unit (PDU): The Muscle of the State
One of the most critical challenges facing the NPP government is the perception that good intentions and policy announcements alone are insufficient to achieve meaningful reform. Even when laws are passed, programs are designed, or structural reforms are initiated, entrenched bureaucratic practices, the so-called Deep State, and systemic inefficiencies can delay, dilute, or entirely block implementation. Each delay not only slows progress but also provides opportunities for vested interests to regroup, resist, or manipulate reforms for personal gain. Without a decisive mechanism to convert policy into action, the ambitious initiatives of President Anura Kumara Dissanayake risk remaining symbolic victories rather than concrete improvements in governance, economic growth, or public welfare.
At the very begging, I proposed to establish an “Operation Room “, a digital monitoring platform within the Office of the President, of which President can see the progress of any development initiative by pressing a button. However, viewing the last year performance outcome, I propose to establish a Presidential Delivery Unit (PDU)—a small, elite, high-capacity team including a Senior & well experienced Economist reporting directly to the President on a weekly basis. The PDU functions as the operational engine room of the presidency, bridging the gap between strategic intent and measurable outcomes. Its core mandate is to ensure that every major policy decision, infrastructure project, and reform initiative is executed efficiently, transparently, and in accordance with predefined timelines. By closely monitoring progress, identifying bottlenecks, and enforcing accountability, the PDU guarantees that Cabinet decisions do not remain on paper but produce tangible, citizen-visible results.
The PDU is designed not just as a monitoring body, but as an active problem-solving unit. Its members—project managers, data scientists, and policy specialists—possess the skills to analyze real-time data, identify delays, and provide actionable recommendations. For example, if a rural development project experiences procurement delays, the PDU can immediately intervene, pinpoint the source of the hold-up, and direct remedial action. Similarly, by leveraging digital dashboards and Key Performance Indicators, the PDU can track energy projects, health interventions, and agricultural programs across the country, ensuring that resources are deployed effectively and results are measurable.
A critical feature of the PDU is its authority to hold top officials accountable. Secretaries of ministries, project heads, and agency leaders are required to respond to PDU reports, explain delays, and implement corrective measures. This creates a system where responsibility is clearly defined and inaction carries professional consequences, breaking the traditional cycle of bureaucratic inertia. At the same time, the PDU encourages innovation and initiative by highlighting successful interventions and providing recognition for high-performing teams, creating positive reinforcement for effective governance.
The PDU also plays a strategic role in reform prioritization. With finite resources and the need to balance short-term quick wins with long-term structural changes, the unit evaluates which initiatives will deliver maximum impact for citizens while strengthening institutional capacity. By sequencing reforms intelligently, the PDU ensures that public trust is reinforced through visible results, while laying the foundation for deeper, more complex structural transformations in governance, productivity, and economic sovereignty.
Ultimately, the Presidential Delivery Unit transforms the presidency from a policy-setting office into a results-driven institution. It ensures that the vision of a clean, efficient, and citizen-focused government is matched by real-world execution. By combining rigorous monitoring, rapid problem-solving, and enforceable accountability, the PDU becomes the muscle of the state, preventing reform fatigue, countering entrenched resistance, and embedding a culture of discipline and performance across the administration. With this mechanism in place, President Anura Kumara Dissanayake can guarantee that the government’s ambitious agenda—spanning anti-corruption, productivity enhancement, capital sovereignty, and social welfare—translates into measurable improvements in citizens’ lives. In essence, the PDU ensures that governance is not only ethical and visionary but also actionable, efficient, and transformative, enabling Sri Lanka to move decisively from survival to sovereignty.
Good intentions are insufficient without institutional muscle or ground reality. The PDU, a small team of elite project managers and data scientists reporting weekly to the President, converts high-level policy into measurable outcomes. By monitoring projects, identifying bottlenecks, and holding Secretaries accountable, the PDU ensures Cabinet decisions translate into results within weeks, not years. It strengthens public confidence, reinforces accountability, and prevents entrenched interests from regaining control, making the presidency a results-driven institution.
Summary and Conclusion: Building Sovereignty Through Execution
Sri Lanka stands at a pivotal moment, facing eight interlinked challenges that define the success of President Anura Kumara Dissanayake’s second year. Bureaucratic inertia and the entrenched Deep State slow reform, while excessive dependence on foreign loans, punitive taxation, and weak industrial value addition limit economic sovereignty. Geopolitical pressures demand a firm yet balanced approach, and citizens now expect visible results from anti-corruption efforts. Weak institutional execution has often prevented well-intended policies from reaching the people.
Overcoming these challenges requires structural, digitized, and execution-driven solutions. Digital governance and Safe Harbors restore efficiency and accountability, while the 2026 Productivity Roadmap and Smart-Agri initiatives embed sustainable growth engines in the economy. Capital sovereignty, value-added industrialization, and digital tax formalization reduce dependency and broaden fiscal capacity. Quick-win relief in energy and essential medicines delivers immediate citizen benefits, reinforcing trust in reform. The Presidential Delivery Unit ensures rapid, measurable implementation, translating policy into tangible outcomes.
Success will be defined not by intent but by execution—visible, sustained, and measurable reforms that build public confidence, strengthen institutions, and secure economic independence. By systematically addressing these challenges, the NPP government can move Sri Lanka from survival to true sovereignty, establishing a resilient, citizen-centered, and prosperous nation for generations to come.
*The writer, among many served as the Special Advisor to the Office of the President of Namibia from 2006 to 2012 and was a Senior Consultant with the UNDP for 20 years. He was a Senior Economist with the Central Bank of Sri Lanka (1972-1993). He can be reached via asoka.seneviratne@gmail.com
