Sri Lanka unveils first post-war budget

Sri Lankan President Mahinda Rajapaksa on Monday unveiled major tax reforms in the country`s first post-war budget that also announced increase in public sector wages and detailed the government`s development plans.

Last Updated: Nov 22, 2010, 22:00 PM IST

Colombo: Sri Lankan President Mahinda
Rajapaksa on Monday unveiled major tax reforms in the country`s
first post-war budget that also announced increase in public
sector wages and detailed the government`s development plans.

Rajapaksa, who is also the finance minister, presented
the budget in parliament today after appointing a 59-member
cabinet for his second term of six years.

The President said his government hopes to increase
the per capita income of Sri Lanka to USD 4,000 by year 2016.

The budget allocated LKR 3 billion for the welfare of
disabled soldiers and their families, while also granting LKR
100,000 for the 3rd child born to soldiers.

Public sector employees numbering 1.2 million, also
received a boost with a 5 per cent non-pensionable allowance
and an additional 600 rupees as cost of living allowance.

The President though had promised LKR 2500 in salary
hike for the public sector during his presidential campaign
early this year.

The budget also proposed to cut down the income tax on
banks to 28 per cent from 35 and slashed Value Added Tax from
20 to 12 per cent.

The budget also proposed to increase electricity
tariff by 8 per cent.

Import taxes on capital goods were also cut down,
including a 25 per cent cut on passenger vehicle import tax.

Exemptions were also granted on electric and hybrid vehicles
while increasing the revenue licence fee by 10 per cent.

Meanwhile, taxes on liquor, cigarettes and casino have
been increased from 35 to 40 per cent.

PTI