Sri Lanka NGO regulation reforms would introduce digital monitoring of foreign funds while replacing the country’s 46-year-old law.
A new Sri Lanka NGO regulation framework would introduce digital monitoring of foreign funds and replace the 46-year-old law governing non-governmental organisations.
The Government is preparing to repeal the Voluntary Social Service Organizations (Registration and Supervision) Act No. 31 of 1980.
Authorities have drafted a replacement titled the 2026 Non-Governmental Organizations (Registration and Supervision) Bill.
However, the proposal has not yet become law.
Chandraratne D. Witanage, Director General of the National Secretariat for Non-Governmental Organizations, confirmed that the draft remains in its final preparation stage.
Get
Breaking News
First
on WhatsApp
Follow The Morning Telegraph for instant alerts, top stories and exclusive updates delivered straight to your phone.
Sri Lanka NGO regulation to use digital monitoring
According to Ministry of Finance sources, the proposed law would establish direct oversight of how organisations receive and use foreign funds.
The Government says the system should help prevent fraudulent transfers, money laundering and terrorist financing.
Authorities plan to create a government-funded digital platform called the National Secretariat for NGOs Portal.
The portal would allow organisations to complete registration online. It would also receive annual action plans and quarterly progress reports.
The proposal would bring organisations currently operating under different legal structures into one national regulatory framework.
These include some organisations registered under the Companies Act.
The Government expects the system to improve transparency and provide regulators with clearer information about funding flows and project implementation.
However, the proposed changes have also generated legal and social debate.
Critics have questioned why organisations already legally registered under the Companies Act should complete another administrative process.
Rules could cover trusts and microfinance groups
The proposed framework would extend beyond conventional local and international NGOs.
It could also cover trusts, small community welfare organisations, societies and microfinance institutions.
Available records indicate that more than 37,000 non-governmental organisations are registered at different administrative levels across Sri Lanka.
Between 1,786 and 1,851 organisations are reportedly registered nationally.
However, National Secretariat data indicates that only about 618 nationally registered organisations are currently active.
A large number operate through regional administrative structures.
The available figures list 1,636 organisations at district level and 38,524 at Divisional Secretariat level.
These statistics appear to overlap with the broader registration total cited in the source material. Nevertheless, they underline the administrative scale the proposed system would need to manage.
Billions enter Sri Lanka through NGO projects
Local and international channels provide billions of rupees to Sri Lankan non-governmental organisations each year.
International NGOs and foreign governments directly fund many nationally operating local organisations.
Officially observable foreign funding for projects reportedly ranges between Rs. 30 billion and Rs. 33 billion annually.
However, preliminary estimates suggest the total approximate or unmonitored flow could reach nearly Rs. 100 billion each year.
The proposed Sri Lanka NGO regulation system would therefore place closer scrutiny on a substantial volume of money entering and circulating through the sector.
United Nations agencies and programmes, including UNDP, UNICEF and WFP, reportedly provide about 1% of the funding received by NGOs in Sri Lanka.
These agencies support programmes involving human rights, democracy and infrastructure development.
Local organisations also receive Corporate Social Responsibility funding from private companies.
Other sources include private donations and smaller contributions from village-level cooperative societies.
Some civil-society organisations also receive Government funding for disaster relief, regional welfare and development programmes.
They may implement those projects jointly with relevant line ministries.
The proposed law aims to consolidate these organisations and funding channels under a single regulatory system.
Supporters see stronger monitoring as necessary to prevent financial abuse. However, the Government will also need to address concerns about duplicated registration, administrative pressure and the effect of expanded supervision on legally operating organisations.
