The Nation Building Tax will be increased from one per cent to three per cent from May 1. This tax is imposed largely on businesses liable to value added tax (VAT).
This tax which was announced by President Mahinda Rajapaksa in his Budget speech last November and is applicable on the turnover on imports, manufacturing and services other than on the banking and financial sector for two years.
The President proposed the tax as a social contribution towards the welfare of the security forces and to rebuild communities and infrastructure facilities affected by terrorism.
Along with the increase in the Nation Building tax, several other taxes too are slated to increase with government revenues nose-diving due to the global recession.
“Government revenue growth declined from almost 25% in the beginning of 2008 to less than 5% by the fourth quarter of 2008,” Central Bank Director Nandalal Weerasinghe told a public lecture on Wednesday.
“Any further deceleration in economic activities during the year would adversely affect the expected revenue collection in 2009. So new revenue measures are being implemented,” he said. As the economy is expected to decelerate to 2.5% to 3% this year, new revenue measures were already on the way, he said.
Import taxes on many items were raised repeatedly from end of last year to now and the business turnover tax is to be increased from May. |
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