More taxes on imported goods to raise revenue
View(s):The Sri Lankan government is to further increase import duty and cess on some of the imported goods soon to increase state revenue, official sources said.
Revenue from import duties last year increased only by 3.7 per cent to Rs. 83.1 billion due to lower import duties and exemptions granted to selected items last year, according to the Central Bank 2013 annual report.
Accordingly, import duties as a share of tax revenue decreased to 8.3 percent in 2013 from 8.8 percent in the previous year, the Central Bank revealed.
With a view to rectifying this situation, the Treasury is to further increase duties of fast moving items such as mobile phones, a range of construction material such as cement, steel, as well as furniture, machinery, luxury vehicles while lowering the excise duty on small cars.
At recent top level meeting, the officials have pointed out that the government’s decision to increase the import duties of items like motor cars resulted in the decline of state revenue as a percentage of the gross domestic product.
The Treasury is also considering imposing a tax hike on consumer items such as toothpaste, biscuits, shampoo packets, etc as well as the raw material used in these products. This is addition to already prevailing taxes like VAT and excise duty.
The cess on potato, big onion and dry chillies will also be further increased due to rising foreign exchange commitments.