Amendments to the Banking Act will strengthen the Central Bank's powers and clear conflicts between Sinhala and English texts.
Parliament also passed amendments to the Monetary Law Act includes empowering the Central Bank to direct all banks to lend to specific economic sectors.
During the budget presentation, the government said agriculture lending has been quite inadequate over the last few years, despite increased savings deposits from the rural economy.
"The share of agricultural credit has declined from 6.3 percent in 1995 to 4.7 percent in 2004," a note circulated among the government parliamentary group said.
Under the amendments, banks are now compelled to increase their agriculture lending portfolio to ten percent within a three year period.
The Monetary Board is also empowered to fix a minimum credit limit for banks in any specified economic sector.
"The provisions are meant to regulate the supply, availability, cost and character of bank credit in accordance with the national monetary policy as determined by the Monetary Board and to ensure that the bank credit is not granted for speculative purposes, or other purposes, prejudicial to the public interest."
Under amendments to the Betting & Gaming Levy Act, the annual fee has been raised to Rs300,000 from Rs200,000 for businesses offering live telecasts. However, the fee has been doubled to Rs50,000 for those not showing live telecasts.
Under the Inland Revenue Bill, the parliament approved an increase in the Port & Airport Development levy to 2.5 percent from 1.5 percent.
Parliament also approved an increase in the Port & Airport Development levy to 2.5 percent from 1.5 percent under amendments to the Inland Revenue Act.
Legislators also approved a tax on foreign films, teledramas and commercials. However, documentaries, educational and children’s programmes are exempted from this tax.
A new change to the Economic Service Charge Act allows companies to set off the levies against any income tax.
Amendments also cut the threshold for liable turnover to Rs40 million per annum of Rs10 million per quarter.
The ceiling on total Economic Service Charge paid by any company has been raised to Rs60 million from Rs50 million.
Several changes were also passed on Value Added Tax, which includes raising levies on financial services to 20 percent from 15 percent.
Parliament also passed a new 15 percent tax on shipping agents for profits attributable to transshipment agency fees.
-Mel Gunasekera: mel@vanguardlk.com
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