President declares tax concessions
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President
Mahinda Rajapaksa |
*Fifteen percent surcharge on import duty
removed
*Import duty on raw materials, machines
reduced
*Three band tariff structure of 5, 15, 30
comes into operation
*Tax on mobiles, cameras, watches,
electronics and motor vehicles slashed
In a major step towards simplifying and broad basing the tax
structure, President Mahinda Rajapaksa in his capacity as Fiance and
Planning Minister has removed the 15 percent surcharge on custom duty
with effect from yesterday. The 2.5 percent import duty on most raw
materials, plant and machinery has also been abolished to provide a
boost to the rapidly recovering post conflict economy. Multiplicity of
custom duty structure has been simplified with a four band duty
structure of 0, 5, 15 and 30 percent, Finance and Planning Ministry
states in a release.
The Government has also slashed duties on motor vehicles by 50
percent in support of the expanding tourism activity and rising level of
tourist arrivals. To promote Sri Lanka as an attractive shopping centre
for internationally branded products - phones, wrist watches, cameras
and electronics have also been brought down below 10 percent of overall
taxes.
These items will be liable only for Port Levy and Nation Building Tax
and have been exempted from VAT and Cess.
A distortionary cess has also been scaled down to boost domestic
activities. Cess will be maintained only for selected imports affecting
domestic activities which require safeguards from unfair import
competition.
The Government is also working towards providing antidumping
legislation, labeling legislation, prescription of quality standards etc
to improve the environment for home based industries to further support
local value added activities while making raw materials, plant and
machinery imports available at zero duty.
As the Government is moving towards a simple tax structure, all
essential commodities will be liable at the point of imports only for a
special commodity levy. This will minimize the cumbersome administrative
procedures particularly for small traders engaged in such import
business.
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