Duminda Hulangamuwa at the Treasury? Fox Guarding the Henhouse!

Statement by United Federation Labour,  27th March 2025

Duminda Hulangamuwa, chairman of the Ceylon Chamber of Commerce (CCC) and advisor to President Anura Kumara Dissanayake, is tipped to succeed Mahinda Siriwardena as the Secretary to the Ministry of Finance of the Government of Sri Lanka (GoSL). Mr. Hulangamuwa is also the Country Managing Partner of Ernst & Young, a leading audit firm in Sri Lanka, which was previously convicted of undervaluing Sri Lanka Insurance for privatization. If appointed the Secretary to the Ministry of Finance, a powerful civil service position integral to economic decision-making and policy implementation in Sri Lanka, it will set a dangerous precedent. It will eliminate the public oversight over the private sector and lead to a conflict of interest, with the private sector gaining an undue advantage over the people of Sri Lanka.

Mr. Hulangamuwa’s appointment will also validate gross financial crimes that the private sector in Sri Lanka has been committing over the years. One example is tax-related fraud. The Annual Reports of the Auditor General reveal that arrears in income tax payments have been increasing gradually, with tax arrears spiking to Rs. 1,066 billion in 2023 from Rs. 904 billion in 2022 and in the Excise and Tobacco sectors to Rs. 7.27 billion from Rs. 5.56 billion respectively. As of the 2023 Annual Report, VAT arrears and penalties imposed were Rs. 455 billion by December 31, 2023. The private sector has been illegally hoarding VAT that the low-income working people pay by bearing a massive burden, with many forced to forego the consumption of essentials due to high costs. CCC that Mr. Hulangamuwa presides over lobbies for the private sector interests that have been engaged in tax-related frauds over the years.

Despite the reluctance of the private sector to pay taxes or dispense tax that the public has already paid to the Government as VAT, they do not shy away from exploiting fallouts in government revenue to make a profit. Banks and finance companies – members of the CCC – make a killing by lending surpluses generated through tax evasion and tax concessions that accumulate within the financial system to the Government. Private sector lobbies such as CCC have also succeeded in persuading the Government and the Central Bank of Sri Lanka (CBSL) to shield the banks, finance companies, and wealthy individuals who own the government’s domestic debt from being subjected to the domestic debt restructuring (DDR) process. In contrast, the Employees Provident Fund (EPF), the only social security fund belonging to low-income working people, was forced to go under the knife by incurring nearly 50% losses in terms of interest payments over the 15 years under DDR. Members of the CCC also own International Sovereign Bonds (ISBs) that triggered the Default in April 2022. Import-export companies, part of the CCC, are accused of contributing to illicit financial flows through trade-misinvoicing, defrauding the Sri Lankan economy of much-needed foreign exchange and tax revenue, according to the Ways and Means Committee report published in August 2024 commissioned by the Committee on Public Finance under Parliament of Sri Lanka. Instead of holding tax evaders, foreign exchange revenue hoarders, and fraudulent currency traders accountable for the Default, the debt restructuring process secured their gains.

Mr. Hulangamuwa has already failed to uphold accountability and transparency by participating in debt negotiations in Washington, representing the Government when members of the CCC – the local creditors – constituted the Local Consortium of Sri Lanka (LCSL) working alongside the Ad Hoc Group of Sri Lanka Bondholders pushing the Government to settle for a bad deal. Mr. Hulangamuwa was a part of the government delegation that consented to a bad deal that increased the total value of repayments to nearly US$ 18.5 billion from US$ 16.3 billion before the restructuring. Without reducing the debt burden adequately, the Government is forced to spend Rs. 60/= in every Rs. 100/= it earns as interest payments in 2025, retaining the title of the highest interest-paying nation in the world. On the other hand, local banks and finance companies – members of CCC – report record profits after debt restructuring.

The private sector in Sri Lanka, whose aspirations Mr. Hulangamuwa embodies, only wishes to maximize its profit. It has constantly pushed for labor reforms—to reduce working people’s wages and slash their rights and other benefits. Maximizing profit for the sake of profit has stagnated the Sri Lankan economy in a low-wage model, with the quality of working people’s lives declining. The low-wage model, which leads to low-end value products, is also at the heart of the regular Balance of Payment crises Sri Lanka faces.

If appointed Secretary to the Ministry of Finance, Mr. Hulangamuwa will further degenerate the Government’s decision-making capabilities, eroding the sovereign interests of the people of Sri Lanka. The ISB deal Mr. Hulangamuwa won for his friends in CCC has already integrated a second default into Sri Lanka’s destiny toward 2028. Mr. Hulangamuwa, as the Secretary to the Ministry of Finance, will surely expedite Sri Lanka’s nose dive and crash.

We, the undersigned, strongly oppose considering Mr. Hulangamuwa for the position of Secretary to the Ministry of Finance. We demand that Mr. Hulangamuwa be removed from the position as an advisor to the President and appoint a qualified civil servant, autonomous from the pressures of the IMF, World Bank, and ADB and capable of directing Sri Lanka towards a debt-free future.

Swasthika Arulingam

President

United Federation of Labour

Endorsed by:

Families of the Disappeared, Human Elevation Organisation, Movement for Land and Agriculture Reforms (MONLAR), Movement for Plantation Peoples’ Land Rights, Shramabhimani Kendraya, Social Institute for Development of Plantation Sector, Standup Movement Lanka, Voice of the Plantation People Organization

Dr. Amali Wedagedara, Bandaranaike Centre for International Studies (BCIS)

Angelica Chandrasekeran – Mental Health Practitioner

Anushaya Collure – Human Rights Activist

Ashila Dandeniya

Skanthakumar – Social Scientists’ Association (SSA)

Chandrika Gadiewasam, Freelance Writer

Christine Perera, Animal and Health Activist

Joanne Senn – Counselling Psychologist

Professor Manjula Magamage, Sabaragamuwa University

Dr. Mahendran Thiruvarangan, University of Jaffna

Ruki Fernando – Human Rights Activist

Dr. Sakuntala Kadirgamar

Sandun Thudugala

Retired Professor Sumanasiri Liyanage, University of Peradeniya

Professor Sumathy Sivamohan, University of Peradeniya

Sunil Bastian – Political Economist

Tharindu Uduwaragedara – Satahan Media and Publishers

Thusitha Siriwardana – Attorney–at–Law