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Taxes hiked on Financial Services, alcohol,

VAT on Financial Services

Sri Lanka to hike value added taxes and excise duties to fund its welfare budget, finance minister Sarath Amunugama said Tuesday. VAT on Financial Services

Sri Lanka to hike value added taxes and excise duties to fund its welfare budget, finance minister Sarath Amunugama said Tuesday. • VAT rate on financial services will go up from 15 percent to 20 percent.

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Estimated revenue is Rs. 2,700 million. Since VAT on financial services is computed on the basis of net profit this will not impose any burden on the people.


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Excise Taxes

On a recommendation of the Presidential Taskforce on alcohol and tobacco and illicit drugs, taxation on alcohol and tobacco is being increased to:

• Excise special provision duty on cigarettes has been increased by cents Rs. 0.50 per cigarette.
• Excise duties on hard liquor has already been raised by Rs. 15 per litre and soft liquor by Rs.

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5 per litre.

"I expect a total revenue of Rs.

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2,550 million," he said.

Mobile Phones

The prevailing 10 percent excise duty on mobile phones has encouraged smuggling of poor quality mobile phones hurting quality supply.

"Therefore, I have removed this duty," he said.

Motor Bikes

Special excise duty for motor-bicycles has been removed to correct prevailing anomalies in the present duty structure.

"This will also reduce the price of motor-bicycles. Locally assembled new motor vehicles which will qualify under FTA arrangements will be exempted from special excise duties," he said.

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Exemptions for Livestock Development

A new 50,000 litre per day milk plant is to be commissioned next year in Kilinochchi, with investments from expatriate Sri Lankans.

Local dairy producers have also spent over a billion rupees to expand existing milk collection and processing plants.


"To promote this industry I propose to exempt milk processing machinery from import duty and VAT. I also propose to increase producer price of milk to Rs.


25-30 per litre range next year and gradually remove the prevailing duty waiver on milk powder to promote the local milk industry.



"

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