The anticipated Budget 2017 was presented in Parliament by Finance Minister Ravi Karunanayake yesterday.
It was the second budget of the Good Governance government and the 70th one of Sri Lanka.
President Maithripala Sirisena was also present in the chambers as Minister Karunanayake announced the budget for over three hours.
At the conclusion of the speech he said that the government is focused on achieving a seven per cent economic growth next year.
Highlights of next year’s budget was the reduction of LP Gas by Rs. 25, a kilo of sugar by Rs. 2, kilo of dhal and green gram by Rs. 10 and Rs. 15 respectively. A kilo of sprats and potatoes were also reduced by Rs. 5 each.
The Finance Minister also said that an additional grant of Rs. 17.84 billion rupees was allocated for the education sector.
Meanwhile, government ministers were quoted saying that next year’s budget is focused on economic prosperity of the country.
Several MPs from other parties showed concerned about the budget stating that it would burden the people, especially the working class.
Following is the summary of Budget 2017
100% capital allowance on investment in sugar manufacturing factories
2% CESS on import of Sugar, 5% on import of Ethanol
Advanced Level students and Advanced Level teachers to receive Tablet Computers
RoC will be opened all 7 days of the week, except on National holidays
Exchange Control Act will be repealed and replaced with Foreign Exchange Act
200% Capital Allowances for Northern Province Investors, 100% Capital Allowance for Eastern Province Investors
Agency for Development to be established to facilitate foreign investment
Apparel sector to be permitted to invest outside Sri Lanka
Corporate tax exemption for headquarters of International Organizations located in Sri Lanka
Remove 25 % CESS on import of Pre-fabricated Structures
Entrepot trading to be permitted on NFE basis
Import Export control fee of 1% on CIF price of Tea to be abolished
Fee on packing of tea and logo registration to be removed
Customs levies on all materials needed for prototypes will be removed
Tax holidays for large-scale investments made in under developed regions of the country
Incorporate a company on PPP basis so that all telecommunication towers will come under the same
75% waiver on PAL on importation of high tech equipment
Amendments to the Debt Recovery Act
Flexible working hours for the Private sector
Proposal to establish Consumer Financial Protection Authority
Minimum room rate of a hotel to be abolished
Proposal to create a Real Estate investment trust
Special board for listing of SMEs at CSE to be introduced
A special SEC Act to be introduced
Remove conditions applicable for foreigners on ownership of ground floor condominiums
A special Colombo Stock Exchange Act to be introduced
Foreigners eligible to buy condominiums with a loan of upto 40% of the value
Highway Toll charges to be reduced by Rs.50 between 9.00pm to 5.00am
Capital Gains Tax to be introduced from April 2017
PAYE tax will apply on earnings more than LKR 100,000 per month Withholding Tax on Interest
Income increased to 5 % Telecommunication Levy to be increased by 25%
Corporate income tax comprises of three layers; 14%, 28% and 40% 14%- SME, Education, Agriculture, Export, Inv Funds 28%- Trade & Manufacturing, Banking & Finance, Insurance 40%- Tobacco & Liquor, Betting & Gaming, Casino
Carbon Tax will be introduced
Revision in rate of Capital Allowance
Tax on dividends increased to 14%
A rebate will be given equal to 75% of income tax attributable to foreign currency earnings in excess of a 15% increase from Y/A 2016/17 vis-à-vis Y/A 2015/16
WHT of 5% will be imposed on specified fee of more than LKR 50,000 per month
The period of appeal hearing at the Tax Appeal Commission will reduce to 6 months from 24 months
A Capital Gain Tax will be imposed at the rate of 10% on gains realized from disposable of immovable properties
The period for appeal hearing by CGIR to be reduced to 6 months from 24 months
VAT refund mechanism on goods purchased by foreigners who stay in Sri Lanka for less than 30 days
The progressive tax structure for individuals will be from 4 % to 24% having equal tax slabs of LKR 600,000 each
SVAT system will be terminated
ESC threshold is reduced to LKR 12.5 Million per quarter
Embarkation Levy will be increased to USD 50
The present annual levy on the business of gaming to be increased to LKR 250 Million
The Special Commodity Levy on white sugar to be revised to LKR 7/kg from LKR 2/kg
Telecommunication Levy on Internet services will be increased to 25%
The present exemption on interest on savings accounts upto LKR 5000 per month will be
The present exemption on dividends received by corporate unitholders of Unit Trusts and Mutual Funds will be removed
Present exemption on certain dividends & interest or profits from investments on listed securities & other instruments will be removed
The notional tax credit will be removed and the income on instruments subject to upfront tax such as TBS, Bonds or Corp Debt Securities will be taxable on the net interests