By Export Development Board 

The Export Development Board (EDB) is pleased to see an export-focused budget, which will support strong export growth, led by investment, value addition and maximising our Sri Lankan natural resources. This is a pivotal change in Sri Lanka’s growth strategy, which will be led by the exporters.

 

Proposal: Establish a modern investment zone for local and foreign private investors under the Strategic Development Act.

 

Proposal: ICT parks in Galle, Kurunagala, Anuradhpura, Kandy and Batticaloa and invest Rs.10 billion to develop these parks as eco-friendly new cities, connected to the expressway network and other infrastructure facilities.

Proposal: US $ 10 million investment in export industries, dairy, fabric, tourism, agri and ICT will get a 10-year tax holiday through the Strategic Development Act.

 

Proposal: Commodity trading: In order to promote the Colombo and Hambantota ports as commodity trading hubs in international trading and to encourage investments in bonded warehouses and warehouses related to offshore business, exempt such investments from all taxes.  

 

Proposal: Pharma manufacture: Provide bank and financial facilities on Treasury guarantees to increase the production capacity of State Pharmaceutical Manufacturing Corporation to expand the production of essential pharmaceuticals. And also to establish a modern investment zone for local and foreign private investors under the Strategic Development Act.

 

Proposal: A five-year tax concession will be made available from January 1, 2021 to domestic industrialists.

Proposal: For the next five years, agri, livestock and fisheries sectors to be income tax free.

 

Expectation/impact on exports: Increase investments and create business opportunities while focusing on a more dynamic business ecosystem.

 

Proposal: Expand the contribution of the diplomatic missions for economic diplomacy.

 

Expectation/impact on exports: Optimises the opportunities for exports, tourism, foreign employment and investment in our country under the dynamic world economic conditions.   

 

Proposal: The EDB and Foreign Affairs Ministry to take the lead in formulating bilateral trade agreements.

Expectation/impact on exports: Expanding the market for exports of our country’s specific agricultural products such as tea, cinnamon, pepper, traditional ornaments and consumer goods, as well as toxic-free vegetables, grains and fruits, etc.

 

Proposal: Formulation of a balanced trade policy yielding long-term returns.

 

Expectation/impact on exports: To increase export earnings of our industrial products and to save foreign exchange through import substitutions that could be produced locally.

 

Proposal: Convert economy as a technology-based entrepreneurial economy by expanding entrepreneurial development, technological infrastructure and related services

Expectation/impact on exports: Enable enhancement of the contribution of the technology sector for exports and its contribution for knowledge and professional services of the national economy. 

 

Proposal: Make import and export procedures more efficient so that the officials of the required regulatory bodies will be assigned to the Import and Export Department to provide the required services.

 

Expectation/impact on exports: Increased facilitation for exports.

 

Proposal: Relaxation of the import and to implement the new tariff system.

 

Expectation/impact on exports: To develop the local garment industry as a local and international garment manufacturing hub with high-quality garment and leather products demanded by foreigners and tourists.

 

Proposal: Establishment of Colombo Port City Economic Zone.

Expectation/impact on exports: Creation of extensive employment opportunities for Sri Lankans and increase in foreign exchange earnings for the country.

 

 

Proposal: Limit importation of agricultural commodities except the items that cannot be produced domestically (Negative List) and to impose the special commodity levy to balance the supply and demand of domestic production for selected agricultural products.

 

Expectation/impact on exports: Enhance the domestic production and increase the export potential of domestic agriculture products.

 

 

Proposal: Impose cess to provide the required protection on the imports and exports of domestic production.

 

Expectation/impact on exports: Encourage domestic production/value addition and increase exports.

 

 

Proposal: Remove import/para taxes on the raw materials not available in the country, machinery and equipment with modern technology and to classify all imports other than the above, under three categories of 0, 10 and 15 percent.

 

Expectation/impact on exports: To boost exports and also to encourage domestic industries to produce value-added goods.

 

 

Proposal: If any commodity has been exempted from VAT at its importation point, it is proposed to exempt from VAT, the domestic production of that particular commodity as well.

Expectation/impact on exports:  Creating a level playing field for local producers thereby enhancing domestic production.

 

 

Proposal: Reduce the tax imposed on their dividends by 25 percent in 2021 and 50  percent in 2023, under the condition that they increase their exports by 30 percent and 50 percent in the respective years. 

 

Expectation/impact on exports: In order to encourage the exports of multi-national companies, which are import based, for requirements of the domestic market.

 

Proposal: Providing temporary import facilities for raw materials, which are not available in Sri Lanka, spare parts, processing and packing materials, labels, stickers, catalogues and brochures to promote the products of direct and indirect exporters. (This scheme will be implemented by the special Export Facilitation Centre established by the EDB and Sri Lanka Customs for small and medium-scale exporters and the inspection of all documents, including import/export declarations will be carried out by relevant institutions at this unit.)

 

Expectation/impact on exports: Enhance the export of high-quality goods through high value addition to local inputs.

 

 

Proposal: Allocate Rs.750 million to take the necessary steps to overcome the barriers faced by our entrepreneurs in order to utilise market opportunities presented in the emerging Asia-Pacific region, Africa, the Middle-East and Western countries.

Expectation/impact on exports: Increase market access for our exports.

 

 

• Exports, tourism, education, medicare, construction and agro processing – 14 percent
• Manufacturing – 18 percent
• Trading, banking, finance, insurance, etc. (standard rate) – 24 percent
• Manufacture and selling or import and selling liquor, tobacco, betting and gaming – 40 percent
• Income generated from the supply of health protective equipment to arms of government and similar products by the Board of Investment (BOI) companies on the request of the Health and Indigenous Medical Services Ministry, Health Services Department, Tri Forces and Sri Lanka Police to be considered “Deemed Exports” (tax rate – 14 percent).

 

• Standard rate – 8 percent (effective from December 1, 2019)
• Supply of financial services – 15 percent
• Export of goods and services – zero rated
• Exemptions apply for specified goods and services

 

• ESC was abolished with effect from January 1, 2020.

 

• NBT was abolished with effect from December 1, 2019.