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2018 budget overview

Minister of Finance and Mass Media, Mangala Samaraweera, arrived at the Parliament to present the Budget proposals for the fourth fiscal year of the Good Governance government.

• He commenced the 2018 Budget Speech (Second Reading of the Appropriation Bill).

• Government expects to achieve 5 percent  economic growth and maintain inflation at 6%. Budget deficit 4.5 percent  of GDP – finance minister

• To become a middle income country by 2025, Sri Lanka needs to achieve rapid economic progress – Samaraweera

• The theme of my budget proposal is “Neela-Haritha Enterprise Sri Lanka” – Samaraweera

• More major reforms of legislation necessary similar to the Inland Revenue Act which was recently passed in Parliament.

• Bankruptcy laws need to be made much more efficient.

• Vehicle policy

• By year 2040 all vehicles in Sri Lanka will be powered by renewable energy.

• By year 2025 all Government vehicles will be either Electric or Hybrid.

• Import tax for electric vehicles will be reduced by Rs 1 million

• Rs 2.5 million import tax on luxury vehicles

• Luxury tax on all super luxury vehicles

• Rs 50,000 tax increase on importing three-wheelers

• Youth who already own three-wheelers will be provided with an opportunity to sell them to countries such as Bangladesh.

• Importing vehicles without airbags will be prohibited in the future.

 

• A new insurance scheme to be introduced for 6 crops including paddy. Rs 40,000 per acre.

• Nation Building Tax to be removed from selected agricultural equipment.

• A new programme to be introduced to promote and develop entrepreneurs in Sri Lanka.

• Loans to be granted to SME industries without guarantors.

• Port authority act needs to be amended to cater to the modern day logistics and shipping activities.

• The center for robotics will be further strengthened

Proposals to stimulate tourism industry. Tourism industry remains a vibrant industry – MS.

Credit facilities to people who want to upgrade their homes to keep tourists as their home stay guests

Impose a tax of 1% on commissions charged by online travel agents (residents and non-residents)

Professional technical training institutes with the support of government of Switzerland and Germany to be established in Badulla, Kandy, Trincomalee, Ratnapura and Anuradhapura.

Budget will ensure that Sri Lankan students will complete at least 13 years of schooling.

University intake to be increase by 20%

• SLTB will also go green – Mangala

• Rs 500 million allocated to introduce eco-friendly buses for SLTB.

• A Carbon tax to be introduced: Motorcycles- 17 cents per day, cars – Rs 1.78 per day, buses – Rs 2.74 per day

• The number of telecommunication towers (around 50,000 in the country) need to be reduced as they are not environment friendly. A tax to be imposed on those towers.

• A virtual blue-green institute to be established.

Railway stations such Nanu Oya, Galle Ella declared as archeological sites

Public–private partnerships (PPP) to operate domestic airports such as Sigiriya

SLTDA will establish 25 lifeguarding stations, 20 tourism policing units

VAT refund scheme for foreign passport holders from May 01, 2018

“Tourist board-approved Tuk-Tuk” prgramme to be launched across the country. Training for this free of charge for drivers.

Nation Building Tax to be removed on rough precious stones brought into the country for cutting, polishing and re-export.

 

Medical faculties to be established in Wayamba, Sabaragamuwa and Moratuwa universities at a cost of Rs 1,250 million.

Medium-size companies run by females will be given access to loan concessions.

Restrictions imposed on foreigners purchasing local land plots to be relaxed.

Import tax on certain foods and beverages for the tourism sector to be removed. The list will be released later.

Health insurance scheme to be introduced for school children to be extended to university students as well.

Production tax to be imposed on sugary drinks. 50 cents per gram with effect from midnight today.

Rs 100 million allocated to develop 100 rural sports grounds

Import tax on sports shoes to be removed from midnight today to help uplift the sports in the country.

49% of liquor consumption is illicit liquor.

NBT to be imposed on liquor from April 01, 2018.

Tax formula to be introduced on volume of liqour

Rs 3 billion to be allocated to support IT startups, SMEs

Rs 50 million to be allocated to establish a Buddhist library

“Fair price shops” to be established across the country with the help of the private sector.

A special ‘Loan Repayment Tax’ will be imposed on all bank transactions at a rate of 20 cents for every Rs 1000 with effect from April 01, 2018. It is a temporary tax which will exist only for 3 years.

Finance minister urges traders to provide the benefit of the reduced levies on essential goods which were gazette yesterday. If not strict action will be taken as decided during the Cabinet meeting this morning, he warned.

 

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