CoPF clears Port City duty-free rule changes, narrows labour law exemptions

Monday, 27 April 2026 00:04 - - {{hitsCtrl.values.hits}}

Eases restrictions on locals purchasing from Port City duty-free outlets
Move aimed at boosting domestic participation amid low tourist inflows
Also revises exemptions under employment law after Court challenge
Govt. urged to extend similar relief to other strategic businesses

The Committee on Public Finance (CoPF) has approved new regulations under the Colombo Port City Economic Commission Act, No. 11 of 2021, easing restrictions on duty-free retail operations within Colombo Port City.

According to a statement from Parliament, the regulations, issued via Gazette No. 2475/28 dated 13 February 2026, relax limits previously imposed on Sri Lankan citizens purchasing goods from duty-free shopping complexes in Port City. The move is aimed at increasing local participation in retail activity within the zone.

Officials told the CoPF that foreign tourist arrivals to Port City remain low, accounting for around 1.5% of total visitors, prompting the shift to widen access for domestic consumers and improve the commercial viability of duty-free outlets.

Members were also informed that the Colombo Port City Economic Commission is monitoring potential leakages of duty-free goods into the local market through unauthorised channels.

Separately, the CoPF approved amendments to regulations issued under Gazette notifications No. 2471/52, 2471/53, 2471/54, and 2471/55 dated 16 January 2026 relating to the Termination of Employment of Workmen (TEWA) Act.

The amendments follow a petition filed before the Court of Appeal, which led the Government to revise an earlier policy that had made the law inapplicable to certain strategically important businesses.

Under the revised framework, only Sections 2, 11, and 12 of the Act will be exempted for such businesses, while the remaining provisions will continue to apply.

Officials said steps are also underway to extend similar exemptions to other categories of strategically important enterprises, identified as Secondary Businesses of Strategic Importance.

The calibrated rollback of these provisions signals a shift towards greater labour market flexibility for strategically important businesses, particularly by removing prior approval requirements for terminations.

While broader legal safeguards remain available through other mechanisms, the change reduces procedural constraints under TEWA, potentially improving operational agility and investment appeal, even as it narrows the scope of protections embedded within the Act itself.