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Budget 2014
1.
2.
3. Contents
1. Overview of Fiscal
Performance
2. Income Tax
3. Value Added Tax
4. Nation Building Tax &
Telecommunication
Levy
5. Import and Export Point
Taxes
6. Tax Administration
7. Socio Economic
Development Initiatives
4. | Overview of Fiscal Performance
1.1 Government revenue has grown at a faster pace than government
expenditure from 2010-2012
Key fiscal performance indicators
Percentage (%) 2010 2011 2012 2013
Estimated
2014
Budgeted
Revenue and Grants/GDP 14.9 14.5 14.1 13.8 14.8
Tax/GDP 12.9 12.4 12.0 12.1 12.8
Expenditure/GDP 22.8 21.4 20.5 19.7 20
Current Expenditure/GDP 16.7 15.4 14.9 14.1 13.4
Public Investment/GDP 6.4 6.2 5.9 5.8 6.7
Budget Deficit /GDP 8.0 6.9 6.4 5.8 5.2
Source: Department of Fiscal Policy
Total government revenue from 2010 – 2012 has increased from Rs. 834 Bn
to Rs. 1,068 Bn at a compound annual growth rate “CAGR” of 13.1% per
annum. However, the total revenue as a percent of Gross Domestic
Production “GDP” has declined during the same period from 14.9% to 14.1%
indicating that GDP growth has increased at a faster pace compared to the
growth in revenue.
Total government expenditure growth from 2010 - 2012 has been slower
compared to the growth in government revenue with government
expenditure increasing at a CAGR of 10.3%. Current expenditure as a
percent of total expenditure has remained stable over the period,
approximately at 73% of total expenditure. One of the key movements seen
in recurring government expenditure is, expenditure on other goods and
services has increased at a CAGR of 26.1% from 2010 – 2012. Furthermore,
expenditure on subsidies and transfer payments has increased at a CAGR of -
9.4% and interest expenditure have increased at a CAGR of 7.6%.
1.2 Budget deficit as a percentage of GDP is showing a declining trend
The overall budget deficit has increased during the period from Rs. 446 Bn
to Rs. 489 Bn. However, the rate of increase has been less compared to the
increase in GDP. As a result, the budget deficit as a percentage of GDP has
gradually decreased from 2010 – 2012 from 8.0% to 6.4%. A notable
observation is that according to the Department of Fiscal Policy, the budget
Our thoughts on Budget 2014 1.1
1
5. deficit is increasingly being financed from domestic borrowings. In 2010
domestic borrowings were 56.3% of total financing requirement, whereas in
2012 total domestic borrowings accounted for 63.0% of financing used to
bridge the budget deficit.
1.3 Growth in GDP has outpaced growth in total debt
Historical movement of Debt
100%
90%
80%
70%
60%
50%
40%
30%
20%
Rs. Bn.
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2008 2009 2010 2011 2012
(provisional)
Domestic Foreign Total debt as % of GDP
Source: Central Bank of Sri Lanka
Total debt has increased between 2008 – 2012 from Rs. 3.6 trillion to Rs.
6.0 trillion. However, total debt as a percentage of GDP has declined from
81.4% to 79.1% during the same period. It is evident from the above
movement that GDP growth has increased at a faster pace compared to the
growth in total debt.
1.4 Trade deficit as a percentage of GDP has increased from 2008 -
Our thoughts on Budget 2014 1.2
2012
As a % of GDP 2008 2009 2010 2011 2012
Exports 20.4% 17.0% 17.6% 18.0% 16.8%
Imports 35.5% 24.5% 27.5% 34.6% 32.9%
Trade balance -15.1% -7.5% -9.8% -16.6% -16.1%
Source: Central Bank of Sri Lanka
Sri Lanka’s exports have increased in absolute terms over the years.
However, the pace of increase has been slower compared to the overall
6. economic growth rate as evident through the decline in exports as a
percentage of GDP from 20.4% in 2008 to 16.8% in 2012 as depicted in the
above table.
A similar pattern is seen in the growth of imports. The total values of imports
have increased during the last five years. However, the growth in GDP has
outpaced the growth in imports during the same period resulting in a decline
in imports as a percentage of GDP from 35.5% in 2008 to 32.9% in 2012.
An important observation from the above table is the trade deficit as a
percentage of GDP has increased from 15.1% in 2008 to 16.1% in 2012. This
implies that the growth in imports have outpaced the growth in exports from
2008 – 2012.
1.5 Fiscal Performance in 2013
According to the Department of Fiscal Policy, total government revenue is
projected to be Rs. 1,203 Bn for 2013, which is an increase of 12.7% vis a
vis 2012. However, total government expenditure is expected to reach Rs.
1,712 Bn in 2013 by increasing at a slower pace of 10% from 2012.
It is important to note that government revenue and expenditure are
expected to decrease as a percentage of GDP during 2013 with GDP growth
continuing to outpace the growth in fiscal revenue and expenditure.
Nevertheless, the budget deficit as a percentage of GDP is expected to
decline to 5.8% of GDP in 2013.
Our thoughts on Budget 2014 1.3
7. 1.6 Summary of Fiscal Performance
Rs Bn
2010 2011 2012 2013
Estimated
2014
Budgeted
Total Revenue and Grants 834 950 1,068 1,203 1,470
Total Revenue 817 935 1,051 1,183 1,437
Tax Revenue 725 813 908 1,052 1,275
Income Tax 136 157 173 240 283
Taxes on Goods and
Services 435 468 520 578 689
Taxes on External Trade 154 187 217 234 303
Non Tax Revenue 93 122 143 131 163
Grants 17 15 16 20 32
Total Expenditure 1,280 1,400 1,557 1,712 1,986
Recurrent 937 1,007 1,131 1,225 1,328
Salaries and Wages 301 320 348 391 411
Other Goods and Services 353 114 140 132 192
Interest 196 357 408 445 441
Subsidies and Transfers 88 217 235 256 285
Public Investment 357 408 444 504 669
Education and Health 33 37 46 56 74
Infrastructure 324 370 398 448 594
Other (13) (14) (18) (16) (11)
Revenue
Surplus(+)/Deficit(-) (120) (72) (80) (42) 109
Budget Deficit (446) (450) (489) (509) (516)
Total Financing 446 450 489 509 516
Total Foreign Financing 195 194 181 150 236
Foreign Borrowings-Gross 270 178 365 247 332
Foreign Commercial 112 110 130 - 98
Debt Repayments (75) (88) (184) (97) (96)
Total Domestic Financing 251 256 308 359 281
Non-Bank Borrowings 204 39 71 105 129
Foreign Investments 49 25 106 53 51
Bank Borrowings (2) 192 132 201 100
Source: Department of Fiscal Policy
Our thoughts on Budget 2014 1.4
8. Our thoughts on Budget 2014 2.1
| Income Tax
2
In the Budget speech delivered in Parliament today the Hon. Minister of
Finance made the following proposals in relation to the taxation of
corporates and individuals.
2.1 Corporate income tax
§ Qualified export profits
Under sections 51 and 52 of the Inland Revenue Act the concessionary rate
of tax of 12% granted for qualified export profits which was to expire on 31st
March 2014 and 2015 has been extended. Relief is granted under sections
51and 52 for profit and income from an undertaking engaged in the export
of nontraditional goods, performance of any ship repair, ship breaking repair
and refurbishment of marine cargo and containers, the provision of
computer software, computer programs or such other services as specified
by the Minister by gazette.
§ Profits from certain services to exporters
Services which could be essentially treated as services provided to
manufacturers of goods for export or the export of services or services
provided to foreign principals directly and payment received in foreign
currency will be taxed at the concessionary rate of 12%. Currently only
services provided to garment exporters are taxed at the reduced rate of 12%
under this section.
§ Services under section 13 (ddd)
Currently services provided by a person or partnership in or outside Sri
Lanka to a person outside Sri Lanka are exempt from income tax if the
income from such services is remitted to Sri Lanka. No change has been
proposed to this concession but it was proposed that such services must be
utilized outside Sri Lanka. Currently the law does not make any reference to
the utilization of such services outside or in Sri Lanka.
§ Small and medium industry tax rate
Currently undertakings engaged in the manufacture of goods or the
provision of services and whose turnover is less than Rs. 500 million per
9. annum is liable to income tax at the rate of 10% on their profits and income.
It has been proposed to increase the rate to 12%. There is no change
proposed to current law with regard to group companies and as such group
companies will not be entitled to the reduced rate.
§ Companies listing in the CSE
Currently a concession is available for companies listing in the CSE which
maintain a minimum public float of 20% to pay income tax at 50% of the
corporate income tax rate for any company that obtains a listing on or
before 31st March 2014 for a period of three including the year of listing. It
has been proposed to extend the listing period by a further three year period
if the Company is paying income tax at the rate of 28%. Thus, in respect of
those companies paying tax at rates below 28% will not be entitled to the
proposed concession.
§ Concessions to acquire financial institutions
The cost of acquisition or merger of financial services companies by the main
company will be allowed as deduction over a period of three years. It is not
known whether the deduction will be available as a deduction against income
under section 25 as a normal expense incurred in the production of income
and also available as a qualifying payment relief under section 34.
2.2 Incentives for professional services
§ Income tax rates
The Hon. Minister has proposed the following incentives for professionals in
employment and those providing professional services.
- Up to Rs. 25 million – maximum rate 12%
- Rs. 25 million to Rs. 35 million – maximum rate 14%
- Above Rs. 35 million – maximum rate 16%
For this purpose a professional in employment has been defined to mean a
medical doctor, engineer, architect, lawyer, pilot, navigation office, software
engineer, accountant and a researcher or senior academic.
§ Construction of residential apartments
A professional who sets up a consortium with a bank and a construction
contractor for the construction of residential apartments for his own use is
entitled to the following concessions.
Our thoughts on Budget 2014 2.2
10. - Qualifying payment relief of Rs. 50,000/= per month on the
Our thoughts on Budget 2014 2.3
repayment of the loan.
- Stamp duty on the transfer of the land reduced by 25%
Such bank will also qualify for a rebate of 50% on the applicable tax rate on
interest earned from a loan granted for such project.
§ Concessions for creation of corporate entities for hub service
The following concessions will be granted to professionals who establish
corporate entities that will provide international services for providing high
end BPO services in accounting, law, finance and procurement.
- 50% rebate on corporate income tax for a period of five year.
- Concessions of 10% of applicable taxes on the import of a motor
vehicle if more than US$ 100,000 is remitted to Sri Lanka in any
consecutive period of three years.
2.3 Other corporate tax concessions
§ International and regional office
In order to promote the relocation of regional operating headquarters or
regional offices of international establishment the following concessions
were proposed.
- Income tax holiday for a specific period
- Deduction of expenses connected with incorporation
- Relief from VAT and NBT for receipts in foreign currency
§ Acquisition of international brand names and IP rights
The following concessions will be available to any establishment which
acquires any internationally recognized intellectual property and earns
income in foreign currency by way of royalty.
- total cost of acquisition will be allowed as a deduction
- Income earned in foreign currency will be exempted for a specific
period.
§ Shipping industry
A deduction of 10% of income tax payable by a ship operator or any agent of
a foreign ship will be allowed in consideration of skills development of
11. trainees engaged in the shipping industry based on the number of individuals
trained.
2.4 Exemptions
§ Institutional exemptions
Exemptions form income tax on profits and income except dividend and
interest is granted to the following institutions.
- National Enterprise Authority
- Sri Lanka Institute of Marketing
- The Institute of Physics
§ Source exemptions
Marginal relief - It has been proposed to grant an exemption from income tax
to an employee of Rs 48,000 per annum to an if he is not engaged in any
trade business, profession or vocation other than for income from
employment or any source from which tax has been deducted at source.
Payments for software - Computer Software payments made by Sri Lankan
Airlines and Mihin Lanka on special requirements of such airline to
nonresident persons will be exempt from income tax.
Dividends - Dividends paid by a company out of dividends received on an
investment made outside Sri Lanka if such distribution is made within one
month of receipt such dividend will be exempt tax.
2.5 Employment income
An individual employed by more than one employer or serving in different
places and receiving the benefit of using a private motor vehicle or receiving
an allowance from more than one employer then the excess of the aggregate
of such benefits or allowance over Rs. 50,000 per month will be taxable.
It has also been proposed to increase the limit to RS. 50,000 for the
application of the 10% tax rate for public sector employees employed in more
than one place of employment.
It has also been proposed to change the definition of an executive from a
person receiving a monthly emolument of Rs. 25,000 per month to Rs.
75,000 per month.
Our thoughts on Budget 2014 2.4
12. 2.6 Restriction on the qualifying payment reliefs and tax holidays
It has been proposed to restrict the qualifying payment relief granted under
section 34 for the expansion of an existing undertaking up until 31st March
2014. It appears that any unclaimed qualifying payment relief as at 31st
March 2014 will be permitted to be carried forward as at present.
Although, there are no specific details it has been proposed to remove some
of the existing tax holidays granted under sections 16 and 17 of the Inland
Revenue Act for new undertakings including the triple deduction of research
and development expenses and the depreciation rates.
It has also been proposed to restrict the income tax exemption granted
under section 22 of the Inland Revenue Act for research and development
companies until 31st March 2014.
All amendments to the Inland Revenue Act will be effective from 1st April
2014.
2.7 Corporate tax rates amended
It was also proposed to abolish with effect from 1st April 2014 the
concessionary tax rate of 10% that is applicable to SME undertakings whose
profits are below Rs. 5 million per annum since the concessionary tax rates
to the SME sector is reduced to 12% based on a turnover threshold. Hence,
the rate of tax of such companies earning less than Rs. 5 million per annum
and turnover exceeding Rs. 300 million per annum will be taxable at the
normal rates unless marginal relief based on profits is provided.
2.8 Insurance industry
The one off transaction relating to the segregation of composite insurance
business under the Insurance Industry Act will be treated as a continuation of
the business and the same position with regard to the life insurance and
general insurance businesses will be maintained with regard to the following.
- Carried forward losses of the existing business
- Set Off of unabsorbed VAT
- Set off of ESC
- Transfer of the asset and the continuation of the claimability of the
depreciation allowance.
However tax proposals have not addressed issues pertaining to setting off of
notional tax credits and stamp duties.
Our thoughts on Budget 2014 2.5
13. | Value Added Tax
3.1 Wholesale and retail trade
The imposition of VAT on wholesale and retail trade which was introduced as
a ground breaking change to the VAT law in the previous budget has now
been extended to such businesses having a turnover exceeding Rs. 250
million per quarter. This is a reduction of the threshold from Rs. 500 million
to Rs. 250 million per quarter thereby expanding the VAT net to medium
scale wholesale and retail traders as well.
The threshold of Rs. 250 million is to be ascertained by considering the
turnover of all companies within a group including subsidiaries and associate
companies engaged in wholesale and retail trade. Therefore group
companies would have ensure that the turnover of all companies within the
group, engaged in wholesale and retail trade, are aggregated in ascertaining
the liability to VAT of each company within the group.
In a move to further tax this sector, the eligibility to claim exemption on
goods, specifically exempt under the VAT law, sold by a wholesaler and
retailer would be restricted to a maximum of 25% of the total sales. This
means that even if the majority of the items sold by a wholesaler or retailer
are specifically exempt from VAT such exemption would not be allowed in full
on the sale of such items but would be limited to only 25% of the total sales
of that entity.
Whilst it has been proposed that the input VAT attributable to the supplies
from the above adjustment would be allowed this may not have a direct
impact since such exempt items would not have input tax at the point of
purchase. Therefore the price of such goods (over and above the 25%
exemption limit) would now increase by 12%. However common inputs such
as common overheads on which input is paid could now be claimed up to 75%
of the turnover based on the above adjustment.
3.2 Removal of exemptions
§ Goods on which the Special Commodity Levy (SCL) is levied at import
point are exempt from VAT at both import point and at the point of sale.
It has been proposed that this exemption on such products be limited
only to import point in the case of traders whose quarterly turnover
exceeds Rs. 250 million from such imported goods.
Our thoughts on Budget 2014 3.1
3
14. SCL is generally imposed at import point on several essential items and
the removal of this exemption at the point of sale would result in the
price of such goods increasing by 12%. This is due to the fact that there
would be no input VAT that can be claimed as SCL is paid at import point
instead of VAT. It is unlikely that the SCL paid at import point would be
allowed as a claim against the VAT.
§ The following items which were specifically exempt from VAT at the
point of import and sale (of such imported goods) have been proposed to
be made liable to VAT at both points with effect from January 1, 2014.
Whilst this would result in the supply of such goods being liable to VAT
this would mean that such suppliers would now have to register for VAT
and the input VAT incurred by such suppliers would be claimable. The
date from which the input invoices can be claimed is not specified and it
is assumed that inputs from January 1, 2014 would be allowed in full.
- Paddy, rice, rice flour
- Wheat, wheat flour, bread
- Cardamom, cinnamon, cloves, nutmeg, mace, pepper
- Desiccated coconuts, fresh coconuts
- Rubber, latex
- Tea including green leaf
- Eggs
- Liquid milk or powdered milk
- Agricultural tractors or road tractors for semi- trailers under HS
Code Nos: 8701.10.10, 8701.10.90, 8701.20.10, 8701.90.10
8701.90.20
- Machinery and equipment for the tea and rubber industry under HS
Code Nos: 8438.80.40, 8429.10
- Machinery for modernization of factories by the factory owner
- Plant and machinery by an undertaking qualified for a tax holiday
under section 24C of the Inland Revenue Act No 10 of 2006
- Pharmaceutical preparations falling under HS Code Nos:
3003.90.11, 3003.90.12, 3003.90.13, 3003.90.15, 3003.90.19,
3004.90.11, 3004.90.12, 3004.90.13, 3004.90.15, or
3004.90.19
The input VAT paid on any goods used in an exempt supply would be
claimable as input at the point such supplies subsequently become liable
to VAT provided such goods are used in making taxable supplies (subject
to certain conditions).
Our thoughts on Budget 2014 3.2
15. 3.3 Exemptions
The following supplies would be made exempt from VAT with effect from
January 1, 2014.
§ Import or supply of copper cables exclusively for the telecom industry
and imported or purchased by any operator of telecommunication
services. The exemption for importation would depend on the non-availability
of such cables locally.
§ The local supply of gully bowsers, semi- trailers for road tractors, any
machinery or equipment used for garbage disposal activities carried out
by any local authority, for the purposes of provision of such services to
the public as approved by the Secretary to the relevant Ministry.
§ Import or supply of the following goods
- Ties and bows under HS Code Nos: 62.15.10, 62.15.20, 62.15.90
- Designer pens under HS Code No: 96.08.30
- Frozen Bait , Fish Hooks/rods/reels, Fishing tackle under HS Code
Nos: 0511.91.90, 9507.10, 9507.20,9507.30 and 9507.90
- Marine Propulsion Engines under HS Code Nos: 8407.21, 8407.29
3.4 Zero rated supplies
§ It is proposed that the transportation of goods and passengers between
International Airports situated within Sri Lanka would be defined to be
international transportation which in effect would result in the zero
rating of such services under the VAT law. Whether such services
between such airports would be limited to transportation via air is not
clear.
§ It is also proposed that aviation services and related activates be zero
rated. It is presumed that this would cover all aviation services both
domestic and international.
3.5 Administration
The contribution to the VAT refund Fund by the Customs is to be reduced to
6% from 10% of VAT collected at import point due to the reduction in VAT
refund claims as a result of the SVAT scheme.
Our thoughts on Budget 2014 3.3
16. | Nation Building Tax & Telecommunication
Levy
The Honourable Minister of Finance announced the following proposals in
respect of Nation Building Tax (NBT) and Telecommunication Levy
4.1 Removal of exemptions
§ Banks and Financial institutions – The business of providing banking and
financial services which were hitherto exempt from NBT has been made
liable to NBT.
The Banking and Finance sector was excluded from NBT from the
inception of the NBT law. The imposition of NBT @ 2% would mean that a
turnover based tax is imposed on this sector after a lapse of 15 years.
Since a Bank or financial institution has several types of activities, on
which activities the NBT will be imposed, is not clear. According to the
present law, leasing of movable property is exempt from NBT. It is not
clear whether the exemption will continue.
§ Goods subject to Special Commodity Levy – Exemption of NBT for local
supply of goods which are subject to Special Commodity Levy at point of
import is removed. Hence, all such goods sold locally either on wholesale
or retail basis will now be liable to NBT. However, the exemption from NBT
at point of import will continue and such goods will be subject to the
Special Commodity Levy. The goods subject to the Special Commodity
Levy are,
- Sprats, Watana, Chickpeas, Green gram, Canned fish, Sugar, Maldives
fish, Dried fish, Orange, Coriander / Cumin / Turmeric (neither
crushed nor ground or crushed or ground), Fennel, Black gram flour,
Ground nuts, Mustard seed, Palm oil - crude and refined, Salt,
Yoghurt, Butter and Margarine.
§ Sale of tractors – Exemption from NBT will apply only for locally
manufactured tractors. The import of tractors falling under the HS Code
numbers, 8701.10.10, 8701.10.90, 8701.20.10, 8701.90.10,
8701.90.20 will be liable to NBT.
Our thoughts on Budget 2014 4.1
4
17. § Pharmaceutical products – Certain specified pharmaceutical products
falling under the following HS Codes were made liable to NBT at point of
import.
3003.90.11, 3003.90.12, 3003.90.13, 3003.90.15, 3003.90.19,
3004.90.11, 3004.90.12, 3004.90.13, 3004.90.15, 3004.90.19
4.2 Exemptions from NBT
The following were exempted from NBT:
§ Retail trade of goods at duty free shops for payment in foreign currency
§ Sale of locally manufactured coconut oil by the manufacturer – period of
Our thoughts on Budget 2014 4.2
exemption is 3 years
§ Distribution of LP Gas
§ Services provided in any Airport for payments in foreign currency
§ Aviation services and related activities – related activities could include,
aviation fuel supplies, ground handling, air cargo and catering facilities
(See Note on VAT)
4.3 Telecommunication levy
§ Present rate of 20% will be revised to 25%
§ Rate of 10% on services provided through Internet/Broadband to facilitate
IT and BPO sectors remains unchanged
§ Effective date for NBT amendments and the Telecommunication Levy –
January 1, 2014
18. | Import and Export Point Taxes
5
It was proposed that all the following changes will be in force with immediate
effect.
5.1 Customs import duty
A four band tariff structure presently in place is further consolidated aligned
with simplicity to facilitate production and trade as follows;
Classification Customs Duty (%) No of Tariff Lines
Essential inputs, not
0 3,376
manufactured locally
Our thoughts on Budget 2014 5.1
Raw materials & semi
raw materials
7.5 184
Intermediate goods 15.0 1,605
End user products 25.0 1,412
Customs Duty has been removed for followings HS Codes:
Sector HS Code
IT Supportive Printers 8443.31.10, 8443.31.90, 8443.32.10,
8443.32.20, 8443.32.90, 8443.39.10,
8443.39.90, 8443.99.10
Optical Fiber Cables 8544.70
Energy Saving Materials 3919.90.10
Customs duty has been revised to 7.5% for following HS Codes:
Item HS Code
Perfumes 3303.00.10
Pens 9608.30
Ties, Bow & Cravats 6215.10, 6215.20, 6215.90
Tea Machinery 8438.80.40
Tractors 8701.20.10, 8701.20.20, 8701.30.10,
19. 8701.30.20, 8701.90.30, 8701.90.40
Steel 7207.11.10, 7207.20.90
Cement 2523.21, 2523.29.10,
2523.29.20,2523.29.30,2523.30, 2523.90
Ayurvedic Industry 2712.10, 2712.20, 3301.25, 3301.90.93,
3301.90.96, 3301.90.99
Our thoughts on Budget 2014 5.2
Fisheries Industry –
Frozen Bait
0511.91.90
Gold** 7108.11, 7108.12, 7108.13, 7108.20
** 100% surcharge has been removed
Customs duty has been revised to 15% for following HS Codes:
Item HS Code
Ayurvedic Industry 2914.29.10
Confectionery Industry
Flavors 2103.90.10(New NSD), 2103.90.90(New NSD)
Cocoa Beans 1801.00.10, 1801.00.20
Motor Vehicles
Diesel Hybrid Vehicles
(New NSD)
8703.31.71, 8703.31.79, 8703.31.81,
8703.31.89, 8703.31.91, 8703.31.92,
8703.31.93, 8703.31.94, 8703.32.51,
8703.32.52, 8703.32.53, 8703.32.61,
8703.32.69, 8703.32.72, 8703.32.81,
8703.32.89, 8703.32.91, 8703.32.92,
8703.32.94, 8703.32.95, 8703.32.96,
8703.32.97, 8703.32.98, 8703.32.99,
8703.33.51, 8703.33.59, 8703.33.61,
8703.33.69, 8703.33.72, 8703.33.81,
8703.33.89
Customs duty has been revised to 25% for following HS Codes:
Item HS Code
Boat Manufacturing
Industry
8902.00, 8903.10.90, 8903.91, 8903. 92,
8903.99.90, 8904.00.10
Wheel Barrows & Parts 8716.80.20 (New NSD), 8716.90.10(New NSD)
Gauze 5803.00, 3005.10, 3005.90
20. 5.2 Import CESS
CESS will be removed / revised on following HS Codes:
Item HS Heading/HS Code
Tung oil 15.15.90.10
Paper board 48.11.51.10
Unbleached Fabric 52.09.11, 52.10.11, 52.11.11, 52.12.21,
58.02.11
Aluminum Wires 76.05.11
Designer Pens 96.08.30
Ties and bows 62.15.10 ,62.15.20 ,62.15.90
Cess rate have been revised on following items to promote local value
addition:
Item Cess Rate HS Heading/HS Code
Cheese, Curd and
similar products
30% or
Rs.
300kg
04.04, 04.06, 04.08, 04.10
Cut flowers, Foliage 30% or
Rs.
110kg
06.03, 06.04
Our thoughts on Budget 2014 5.3
Vegetables (Cabbages,
Lettuce, Carrots,
Cucumbers,
Leguminous
vegetables, Tomatoes,
and similar vegetables (
fresh, Chilled or
cooked)
30% or
Rs.
110kg
35% or
Rs.
110kg
20% or
Rs. 25kg
35% or
Rs.
125kg
07.04,07.05, 07.06,07.07,07.08,
07.09,07.10, 07.11, 0712.31,
0712.32,0712.33,0712.39,0712.90.
10,
20.01,
20.02,
20.04,20.05
Mushrooms and truffles 35% or
Rs.
20.03
21. 125kg
Our thoughts on Budget 2014 5.4
Manioc, Sweet potatoes
and similar yams
30% or
Rs.
110kg
07.14
Nuts and Fruits(
Pineapples ,Avocados,
Guavas, Mangoes,
Mangos teens, Citrus
fruit ( except fresh
Mandarins and apples) ,
Melons, Papaws, pears,
Apricots, Cherries,
Peaches and other
similar fruits and nuts
(fresh, dried or
prepared)
30% or
Rs.
110kg
30% or
Rs.
120kg
30% or
Rs.
120kg
(Dates
25% or
Rs. 25kg)
30% or
Rs.
120kg
30% or
Rs.
120kg
35% or
Rs.
125kg
08.01,08.02
08.03
08.04
08.05( except 0805.20.10)
(Dried Orange 20% or Rs. 120kg)
08.06, 08.07, 08.08, 08.09, 08.10,
08.11, 08.12, 08.14
2006.00.10, 20.06.00.90, 20.07.91,
20.07.99, 20.08
Fruit juice 35% or
Rs.
110kg
20.09
coffee, pepper, vanilla
and cinnamon
15% 09.01, 09.04, 09.05, 09.06
Artificial Flowers 35% or
Rs.
1000kg
67.02
Mosquito coil 25% 38.08.50.10
Wheat or Meslin flour Rs. 25kg 1101.00.10
Margarine or vegetable
5% or
fats and poultry fat
Rs. 15kg
15.01, 15.09, 15.10
22. Rs. 75kg 15.17
Our thoughts on Budget 2014 5.5
Sausages and similar
products
30% or
Rs.
110kg
16.01, 16.02, 16.03
Sauces and
preparations
30% or
Rs.
125kg
21.03
Sugar confectionary 35% or
Rs.
100kg
17.04
(Packages of 1kg or less – 35% or Rs.
100kg or 35% of 65% of MRP)
Chocolate and other
preparations containing
cocoa
10%
35% or
Rs.
100kg
18.02, 18.03, 18.04
18.06
(Blocks, Slabs & Bars – 35% or 100kg
or 35% of 65% of MRP)
Pasta and similar
products
30% or
Rs. 80kg
19.02
Cereals and similar
products
15%
30% or
Rs. 80kg
11.04
19.04
Soups and broths and
similar preparations
30% or
Rs.
125kg
21.04
Ice cream and other
edible ice
30% or
Rs.
125kg
21.05
Waters including
natural or artificial
mineral waters
35% or
Rs. 110
Ltr
22.01, 22.02
paints and varnish Rs. 80kg 32.08,32.09
Beer made from malt,
40%
22.03
un denatured ethyl
alcohol and similar
50%
22.08
beverages
Vinegar 35% or
Rs.
100Ltr
22.09
Candles 30% or
Rs. 75kg
34.06
23. Battery 5% 85.06.10
Josh Sticks Rs.
1,000kg
33.07.41
Our thoughts on Budget 2014 5.6
Portland cement in
packing of 50 kg and
below
10% 2523.29.20
Gauze Rs.
100kg
3005.10, 3005.90 , 58.03.00
Soap and Face Wash 25% or
Rs.
150kg
3401.11, 3401.19, 3401.20 ,
3401.30
(Retail packages 25% or Rs. 150kg or
25% of 65% of MRP)(Soap noodles 8%)
Laminated Sheets 15% or
Rs.
150kg
39.20
(Of other polyester 20% or Rs. 150kg)
Sanitary napkins 30% or
Rs.
300kg
96.19.00
Steel Products Rs. 15kg
Rs. 30kg
25%
20%
8%
72.04
72.14.20.90
73.06.30 , 73.06.61.90
73.06.69.90 ,73.06.90.90, 73.23
73.14.20 , 73.14.31, 73.14.41,
73.14.42, 73.14.49
Aluminum bars and
tubes
5%
10%
76.04, 76.08
76.10
(Day lighting Devices 5%)
Padlocks, hinges Rs. 50kg 83.01, 83.05 ,83.06
83.02.10
Aluminum – Rs. 50kg
Other – Rs. 30kg
Furniture 30% &
20%
94.03
Brooms and Brushers 20% or
Rs. 75
Unit
96.03
Rubber Machines and
rubber products
4084.20.10.10.
Unbleached Fabric Rs. 75kg 52.09.11, 52.10.11, 52.11.11,
52.12.21, 58.02.11
24. 5.3 Export Cess
To promote local value addition CESS has been introduced for following
items:
Item HS Heading/HS Code
Pepper 09.04.11.10 - Rs. 10kg
Cinnamon (Organic) 09.06.11.10 – Rs. 6kg
Clove (Organic) 09.07.10.10 – Rs. 6kg
Nutmeg and Cardamoms
(Organic)
09.08.11.10 – Rs. 10kg
5.4 Excise (Special Provisions)
New National Sub Headings and new Excise (SP) Duty Rates on such items
will be introduced to the following HS Codes:
HS Code New national sub headings
8703.31 8703.31.71,8703.31.81, 8703.31.91,
8703.31.93,
8703.31.79, 8703.31.89, 8703.31.92
8703.31.94
8703.32 8703.32.51, 8703.32.53, 8703.32.61
8703.32.52, 8703.32.59, 8703.32.69
8703.32.72, 8703.32.81, 8703.32.91,
8703.32.94, 8703.32.96, 8703.32.98
8703.32.79, 8703.32.89, 8703.32.92,
8703.32.95, 8703.32.97, 8703.32.99
8703.33 8703.33.51, 8703.33.61,
8703.33.72, 8703.33.81
8703.33.59, 8703.33.69,
8703.33.79, 8703.33.89
8704.21 8704.21.51, 8704.21.52,
8704.31 8704.31.41, 8704.31.42
The Excise (SP) Duty on following HS Codes will be revised.
Our thoughts on Budget 2014 5.7
25. Item HS Code
Petrol 2710.12.20 (Rs. 27 per ltr)
Diesel 2710.19.40 (Rs. 3 per ltr)
Lorries & Trucks 8704.21.51, 8704.31.41 (14%)
8704.21.52, 8704.31.42(14% or Rs. 109,000
per unit)
Trishaws 8703.21 & 8703.31
The description of the following HS codes will be revised.
8704.21.51, 8704.21.52, 8704.21.61, 8704.21.62, 8704.21.63,
8704.21.64, 8704.31.41, 8704.31.42, 8704.31.51, 8704.31.52,
8704.31.53, 8704.31.54
5.5 Special Commodity Levy
The special commodity levy will be revised on import of the following items:
Item HS Code
Sprats 0305.59.20
Watana – whole/ split 0713.10.10, 0713.10.20
Chickpeas – whole/ split 0713.20.10, 0713.20.20
Green gram 0713.31.10
Canned fish 1604.11, 1604.12, 1604.13, 1604.14, 1604.15,
1604.16, 1604.17, 1604.19, 1604.20
Sugar 1701.12, 1701.13, 1701.14, 1701.91.10,
1701.91.90, 1701.99.10, 1701.99.20,
1701.99.30, 1701.99.90
Maldive Fish 0305.59.10
Dried Fish 0305.59.90
Orange 0805.10.10
Coriander – neither
crushed nor ground or
crushed or ground
0909.21, 0909.22
Our thoughts on Budget 2014 5.8
Cumin - neither
crushed nor ground or
crushed or ground
0909.31, 0909.32
Fennel 0909.61.20
Turmeric - neither 0910.30.10, 0910.30.90
26. crushed nor ground or
crushed or ground
Black gram flour 1106.10.10
Ground nuts 1202.42
Mustard seed 1207.50
Palm oil - crude and
refined
1507.10, 1507.90, 1511.10, 1511.90.10,
1511.90.20, 1511.90.90, 1512.11, 1512.19,
1513.11.11, 1513.11.19, 1513.11.21,
1513.11.29, 1513.19.10, 1513.19.90, 1513.21,
1513.29
Salt 2501.00
Yoghurt 0403.10
Butter 0405.10
Margarine 1517.10.10, 1517.10.90
5.6 Port & Airport Development Levy
The PAL will be revised as follows:
Aviation Fuel under HS Code No 2710.19.20 Free
Imports of pharmaceutical products under HS
15%
Code No’s, Nos3003.90.11, 3003.90.12,
3003.90.13, 3003.90.15, 3003.90.19,
3004.90.11, 3004.90.12, 3004.90.13,
3004.90.15, or 3004.90.19, 3004.10,
3004.20, and 3004.90.90
5.7 Tariff reductions under the Free Trade Agreements
Under South Asia Free Trade Agreement (SAFTA) and India-Sri Lanka Free
Trade Agreement (ISFTA), items 208 and 10 are removed respectively under
from the negative list of Sri Lanka.
Indo-Sri Lanka Free Trade Agreement (ISFTA)
Customs Duty on the following tariff lines in the negative list of Sri Lanka will
be zero rated.
Our thoughts on Budget 2014 5.9
27. Item HS Code
Pectic substances, pectinates and pectates 1302.00
Agar-agar 1302.31
Mucilages and thickeners, whether or not
1302.32
modified, derived from locust beans, locust
bean seeds or guar seeds
Pet food for retail sale 2309.10
Yarn used to clean between the teeth
3306.20
(dental floss)
Trade advertising material, commercial
catalogues and the like
4911.10
Corrugated sheets 6811.81
Other sheets, panels & tiles 6811.82
hard rubber or plastics - Combs, hair-slides
9615.11
and the like
Other - Combs, hair-slides and the like 9615.15
South Asia Free Trade Agreement (SAFTA)
Category Item No
Least Developed
Countries (LDCs)
0104.10, 0104.20, 0201.10, 0201.20,
0201.30, 0202.10, 0202.20, 0202.30,
0205.00, 0206.10, 0206.21, 0206.29,
0207.27, 0209.00, 0307.99, 0711.20,
0802.11, 0802.12, 0802.21, 0802.31,
0802.40, 0802.50, 0802.60, 0809.10,
0809.20, 0809.30, 0812.10, 0813.10,
0813.20, 0909.10, 0909.40, 0910.20,
1001.10, 1109.00, 1212.21, 1302.11,
1302.12, 1302.13, 1302.20, 1302.31,
1302.32, 1302.39, 1404.20, 1501.00,
1505.00, 1522.00, 1603.00, 1604.11,
1604.12, 1604.19, 1604.30, 1702.20,
1702.40, 1702.50, 1702.60, 2309.10,
2710.91, 2711.11, 2711.14, 2711.19,
2711.21, 2711.29, 2713.11, 2713.12,
2713.20, 2713.90, 2714.10, 2714.90,
2715.00, 4007.00, 4805.11, 4805.12,
4805.19, 4808.30, 4808.90, 4823.20,
6811.81, 7309.00, 7318.12, 7318.13,
Our thoughts on Budget 2014 5.10
29. 5.8 Other
In order to maintain a rational tariff structure, the list of items given below is
placed on the negative list of BOI concessions. The BOI could permit
companies to import these items on duty free basis only if such items are not
available from local suppliers, with the concurrence of the Director General,
Department of Trade and Investment Policy.
Our thoughts on Budget 2014 5.12
Item No. Commodity
1 Cement
2 Steel reinforcement
3 Plywood sheets
4 Aluminum cladding material with framework
5 Plywood doors
6 PVC doors
7 Staircase, handrails, nosing and fittings
8 Ceramic/porcelain wall tile, floor tiles, marble floor tiles, granite and
quartz tiles
9 Column corner guards for car park area
10 Paints
11 Aluminum and zinc/aluminum roller shutters
12 Manhole covers and grating
13 Bell and bell switches
14 Electrical wires and cables
15 Telephone cables
16 Main distribution frames, distribution/junction boxes etc
17 PVC floor gullies
18 WC’s wash basin, bidets, vicinity basins, bath tubs, urinals and other
sanitary fittings and fixtures
19 Power coated louvers and drills
20 Cast iron drainage fittings
21 Timber doors
22 Hinges for doors and windows
23 Floor hinges and spring hinges
24 Casement stays and casement fasteners for windows
25 Door locks, door closers, door handles, door stoppers (allowed if
they come as composite units)
26 Panel bolts
27 Toilet partitions
28 Wall finishing material
31. | Tax Administration
6
6.1 Introduction of the Revenue Administration Management Information
Our thoughts on Budget 2014 6.1
System (RAMIS)
It is proposed to introduce a new system i.e. RAMIS to automate the process
of IRD and eventually link the IRD with the following departments;
§ Sri Lanka Customs
§ Department of Registrar of Companies
§ Department of Motor Traffic
§ Land Commissioner General’s Department
§ Ministry of Finance and Planning
A unique personal identification number will be used to coordinate all
transactions and to facilitate online tax payments.
6.2 Tax clearance to be filed with the Registrar of Companies as part of
the Annual Return
The Inland Revenue Act currently imposes a duty on the Registrar of
Companies to obtain a certificate issued by the Commissioner-General of
Inland Revenue as an integral part of the annual return filed under the
Companies Act in certain instances. In order to give power to the Registrar
of Companies to effectively enforce this duty it is proposed to make the
corresponding changes to the Companies Act. Therefore, the Companies Act
will be amended to make it necessary to obtain a tax clearance certificate
from the Commissioner General of Inland Revenue as part of the annual
return under the Companies Act.
Further, a tax clearance certificate will be required before effecting the
liquidation or any change such as amalgamation, merger or re-structuring.
6.3 Restrictions on secrecy provision
The official secrecy provision in section 209 of the Inland Revenue Act will
be amended to enable the dissemination of specific information to
Government Institutions such as the Department of Customs and the
Department of Sri Lanka Police.
32. 6.4 Preferential claim for tax in default at liquidation - expanded
Currently the Companies Act provides a preferential claim at liquidation for
income tax charged or chargeable for one complete year prior to
commencement of liquidation. This year is selected by the Commissioner
General of Inland Revenue. This preferential claim which is currently for 1
year is to be expanded to 5 years. This expansion may be extended to the
preferential claim given for rates and taxes in addition to income tax.
6.5 Default Tax Recovery Act
Relevant provisions in the Inland Revenue Act relating to the recovery of
taxes will be introduced to the Default tax Recovery Act, in order to
strengthen the recovery process.
6.6 Economic Service Charge Act- changes to time bar provision
As the ESC Return is filed on an annual basis with effect from April 1, 2011
the prevailing time bar provision in the ESC Act is to be amended on similar
lines of the time bar provision in the Inland Revenue Act.
6.7 Rules and regulations to be introduced to upgrade the standard and
quality of services of approved accountants and authorized
representatives
6.8 List of inactive VAT registrations to be published in the IRD Web-site
6.9 Technical ratifications
It is proposed to make necessary adjustments to the respective provisions of
the Inland Revenue Act, Value Added Tax Act, Nation Building Tax Act,
Economic Service Charge Act, Finance (Amendment) Acts, Default Tax
(Special Provisions) Act, Telecommunication Levy Act, Ports and Airports
Development Levy Act and Tax Appeal Commission Act to rectify certain
ambiguities and unintended effects (including differences in translation).
Our thoughts on Budget 2014 6.2
33. | Socio Economic and Development Initiatives
Initiatives to enhance economic and social development
Building on the far reaching socio-economic policies undertaken in previous
years, His Excellency the President has made a number of proposals
including infrastructure, urban and rural development, promoting research
and development, self employment, enhancing local industries, providing
welfare and state sector restructuring initiatives. A synopsis of these
proposals is presented in this section, together with stated proposed
allocations as follows.
Infra-structure development
Area Purpose Amount
Our thoughts on Budget 2014 7.1
Establishment of
national community
water supply
department and related
development work
To regulate and develop
water supply schemes,
to ensure water quality
standard and proper
maintenance of related
projects.
LKR 300Mn.
Agrarian livelihood and
irrigation
Development of
selected irrigation
schemes.
Modernisation of
agrarian service
centres.
Rehabilitation of tanks
and restore abandoned
paddy lands.
LKR 14,000Mn.
LKR 300Mn.
LKR 2,300Mn.
Fisheries Development of fishery
harbors and anchorage
facilities.
LKR 1,000Mn.
Divi Neguma- Gama
Neguma
Development of
thousand bridges and
upgrading road
facilities to connect
villages.
Provision of small buses
LKR 4,500Mn.
LKR 300Mn.
7
34. Area Purpose Amount
for remote villages.
Our thoughts on Budget 2014 7.2
Greater Colombo flood
protection program
To develop drainage
system and rehabilitate
canal system and
improve Colombo and
surrounding residential
areas.
LKR 1,500Mn.
Township development Upgrading and
modernizing housing
schemes.
Low income housing
development program.
LKR 800Mn.
LKR 500Mn.
Research and Development
Area Purpose Amount
Food technology Research and
laboratory facilities in
universities in
provinces.
LKR 500Mn.
Agrarian and irrigation Development of high-quality
seed and
planting material.
LKR 300Mn.
Sri Lanka as a regional
medical hub
To build a state-of- the-art
post graduate
institute of medicine.
LKR 600Mn.
National Science Centre Establishment of a
national centre.
LKR 600Mn.
Industries
Area Purpose Amount
Livestock and poultry
industry
Strengthening of
veterinary services
Allowance for
veterinary surgeons.
LKR 200Mn.
LKR 50Mn.
IT industry Expansion of Nenasala
centres and new
facilities.
LKR 1,000Mn.
35. Our thoughts on Budget 2014 7.3
Welfare
Area Purpose Amount
Health services Rural water purification
project for north
central province.
LKR 900Mn.
Healthcare Investment in non-communicable
diseases
framework viz. cancer,
stroke and kidney.
Modernisation of two
national children
hospitals.
Development of
Colombo, Ragama and
Kalubowila hospitals.
LKR 2,000Mn.
LKR 1,000Mn.
LKR 12,000Mn.
Partnership with World
Food Program
Set up of a revolving
fund to streamline
production and
marketing facilities in
major grain producing
districts.
LKR 1,500Mn.
Farmer pension scheme
and crop insurance
scheme
Capital contribution in
order to provide
welfare to farmers
above 63 years.
LKR 1,000Mn.
Social services Modernisation of
vocational schools for
the needy.
LKR 100Mn.
Child abuse and
violence against women
Preventive measures of
violence.
LKR 700Mn.
Arts and culture Set up two performing
arts and cultural
centres.
Modernisation of three
selected theatres.
Five holiday bungalows
for artists.
LKR 1,500Mn.
LKR 3,000Mn.
LKR 100Mn.
Education and
sanitation
Upgrade sanitation and
other facilities in rural
schools
Modernisation of
LKR 1,000Mn.
LKR 750Mn.
36. Area Purpose Amount
teacher training
colleges.
To improve and
upgrade Pirivena
education facilities
Skills development and
youth affairs.
LKR 450Mn.
LKR 1,200Mn.
Youth development For youth development
programs.
Encourage participation
at the 2014 UN Youth
conference programs.
LKR 150Mn.
LKR 250Mn.
Our thoughts on Budget 2014 7.4
Other Sectors
Area Purpose Amount
Convert long-term
To strengthen financial
loans of selected state
position and enable
enterprises to equity:
annual dividend to the
CEB, NWS&DB, Airport
Treasury.
& Aviation Services,
SLPA
Not mentioned.
Sri Lankan and Mihin
Airlines: Government to
take-over the shares
held by state banks
On-going capitalization
to strengthen the two
airlines.
USD 200Mn.
Sri Lanka Transport
Board
Bridge revenue
shortfall.
Strengthen bus fleet.
LKR 500Mn.
LKR 1,000Mn.
Local government To provide capital
equipment and
supplement working
capital for community
infra-structure
facilities.
LKR 3,400Mn.
Wildlife protection and
conservation
Develop wildlife
conservation and
protection schemes and
provide for capital
equipment for wildlife
department.
LKR 1,200Mn.
37. Area Purpose Amount
Legal and judicial
reforms
Modernisation program. LKR 500Mn.
Police service Housing schemes
Expansion of facilities
at the Police Academy.
LKR 1,500Mn.
LKR 500Mn.
Our thoughts on Budget 2014 7.5
Peoples’
representatives
Implement small and
special development
projects under Special
Task Force.
LKR 4,000Mn.
2017 Asian Youth
Games
Preparation of Youth
for the 2017 Asian
Games.
LKR 500Mn.
Subsidies and Incentives
Sector Subsidy/Incentive Details
Agrarian, Livelihood
and Irrigation
Fertilizer Subsidy. Fertilizer at LKR
350/per 50/kg bag
during Yala and Maha
Seasons.
Fertilizer at LKR 1,250
per 50/kg bag for
other crops.
Agrarian, Livelihood
and Irrigation
Motor Cycles subsidy for
field officers
LKR 2,300Mn.
Smallholder
Plantations
Land Improvement
Subsidy -water and soil
conservation.
LKR 200Mn.
Backyard Economies-
Divi Neguma- Gama
Neguma Participants
Incentivise the
participants of the family
oriented micro-enterprise.
Development
scheme.
LKR 10,000 for each
of the 5 best backyard
economies/ home
gardens in each Grama
Niladari division.
Divi Neguma- Gama
Neguma – District level
Supervisors
Incentives to coordinate
rural -centric work and
to promote better
expenditure
management and
supervision at district
level.
Allowance of LKR
15,000 to District
Secretaries, LKR 5,000
to Divisional
Secretaries and LKR
3,000 to Planning
Directors and Chief
Accountants.
38. Sector Subsidy/Incentive Details
Small Businesses and
Self employment
Self Employed.
incentives.
Divi Neguma
entitlement cards at
LKR 500 each:
- Exemption from
multiple tax
payments to local
authorities.
- Reduced annual
lease rental of LKR
1,000 for less than
half an acre state
land leases.
Small Entrepreneurs Long term lease
incentive.
For leases already over
10 years to be given
the option to convert
to a 50 year long term
lease.
Health Services Incentive payments for
hospital staff.
LKR 100Mn.
Skills education Incentives for lecturers
and students in
vocational education
LKR 300Mn.
Regional medical hub Research allowances for
doctors and medical
interns.
LKR 1,400Mn.
Our thoughts on Budget 2014 7.6
Low cost financing schemes
Sector Purpose Financing
Manufacturing and SME
Industries
Modernization of
factories with energy
efficient technology.
Euro 90Mn credit
facility at an interest
rate not exceeding 8%.
High performing
plantations
Replant an agreed
extent and ensure
social development of
plantation workers and
to increase the volume
of value added tea
exports.
Credit scheme with a 8
year tenure at 6%
interest.
Banking Institutions to
establish LKR 500Mn
loan scheme in 2014.
Dairy Industry- SME Promote dairy farms,
collection centers and
A special loan scheme
at an interest rate of
39. Sector Purpose Financing
equipment,
development of animal
feed etc.
8%.
Our thoughts on Budget 2014 7.7
Backyard Economies-
Divi Neguma- Gama
Neguma
Develop greenhouse
farms poultry,
livestock, fish farms,
handloom, and small
industries.
Banks and Financial
Institutions to grant at
least 500 working
capital loans of LKR
25,000 at 6% interest
without collateral.
Women Micro
Enterprises
Working capital
financing.
Women Micro
Enterprise Credit
Guarantee Scheme to
provide loans upto LKR
250,000 without
collateral.
Regional Development
Banks and SME Banking
Units of Commercial
Banks to provide the
loan facility.
Small Businesses and
Self Employed
50% of investment
savings of Divi Neguma
and Samurdhi
beneficiaries and small
time traders to be
given small loans at low
interest rates by banks
on the basis of group
security by borrowers.