Income tax on the ICT sector will be kept at a maximum 16 percent, Rajapaksa, who is also finance minister, told parliament, while presenting the government budget for 2013.

The island's business process outsourcing firms and foreign investors in the sector have complained the high cost of broadband services was hindering expansion.

The sector has annual export earnings of around 400 million US dollars which the government aims to increase to a billion dollars in the next few years and generate 150,000 jobs, he said.

The government has identified the ICT sector, especially business process outsourcing, as one that has potential to increase foreign exchange earnings and generate more employment.