Economic impact of coal scam far exceeds direct losses

Direct financial losses from the substandard coal import scandal can be calculated, but the vast indirect economic damage remains beyond the scope of current investigative committees. Professor Prasanna Perera of the University of Peradeniya raised these concerns during a press briefing at the Samagi Jana Balawegaya (SJB) headquarters.

While the committee can identify a direct loss of approximately 8 billion rupees, the actual cost is significantly higher. Professor Perera noted that additional expenses arise from the increased volume of coal needed for power generation and potential mechanical failures at the Lakvijaya Power Plant. To capture the full scale of the crisis, the SJB urged the inclusion of economists from the University of Ruhuna in the committee to assess indirect costs like:

•          Environmental pollution and health impacts.


•          Higher costs for emergency power purchasing.


•          Industrial losses due to inconsistent power supply.


•          Increased production and transportation costs for businesses.

Beyond the coal scandal, Professor Perera characterized the current tax regime as "destructive," citing recent Human Rights Watch reports that label the 2025 tax policy as ruinous. Current rates—including 18% VAT, 30% corporate tax, and up to 36% PAYE tax—have restricted the labor supply and stifled job creation.

Data reveals that the industrial sector lost 15.1% of its workforce in 2023, with approximately 30 small and medium-scale enterprises (SMEs) shutting down. This environment has accelerated the brain drain of highly skilled professionals, threatening the country's long-term growth. The government must immediately reconsider its tax strategies and prioritize job security and youth-focused economic programs to prevent further collapse.