January 23, 2007 (LBO) – The government plans to raise the duty free allowances for Sri Lankans retuning from foreign employment to 5,000 dollars, an official from the Labour Ministry said Tuesday. Sri Lankans returning from a stint abroad are currently given a duty free allowance of up to 1,750 dollars if they stay away for a year.
“We plan to increase the allowance to 5,000 dollars to encourage more Sri Lankans work abroad,” L.K. Ruhunage, Deputy General Manager (Foregin Relations), Labour Ministry said.
Over 1.5 million Sri Lankans living and working overseas remitted about 2.3 bilion dollars last year, Ruhunage said with the government now targetting a figure of 3.0 billion dollars this year.
He did not give a time frame as to when the policy will come into effect.
Remittances are vital to bridge Sri Lanka’s trade deficit, and dollar savings in commercial banks are increasingly tapped by the government, through 2 to 3-year dollar denominated floating rate bonds.
Sri Lanka has also taken floating rate loans from the state banks on a similar to bridge the deficit, but is yet to raise dollar loans with maturities long enough to support real development oriented capital pro