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| Sunday, 21 November 2004 |
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| News Business Features Editorial
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Budget at a glance 'Gamata Thaakshanaya'
*The Ministry of Science and Technology will establish a computer linked Vidatha resource centre in each of the 320 Divisional Secretariats. At village level science and technology societies will be formed to transfer technology to the village and promote SMEs to provide employment and reduce poverty. These centres will be linked to the SME bank and regional development banks, as well as IDB and EDB. Pubudamu Wellassa A three year accelerated development program to improve the infrastructure facilities of Badulla and Moneragala at a cost of Rs 1200 m. Rajarata Navodaya A three-year development program to develop infrastructure gaps which are not covered under the existing programs of line ministries and provincial councils. Total project cost Rs 1600 m. Dayata Sevana The budgetary allocation for housing will be increased by Rs 500 M. Priority will be given to low-income housing requirements. An owner who gives a house on rent will be eligible for a seven year tax exemption on the rental income if the floor area of the house does not exceed 1500 Sq.ft. The construction cluster of the NCED together with NHDA will simplify the approval procedure for housing construction. Dairy Industry *Increase milk producer price to Rs20 per litre. *Removal of VAT on animal feed *Allocate Rs 50 m. for the development of the industry in rural areas. *Gradual phasing out of the prevailing duty waiver on milk powder to ensure remunerative prices to local dairy farmers. Organic Export products *Rs 10 Mln fund to share the cost of certification *Declare selected areas as watershed protected organic export zones *Establish Organic Product Zones. Value added cinnamon export *Establish a Cinnamon Development Fund *Cess of Rs 2.50 per Kg or 0.5 percent of the value which ever is higher Cultivation and value addition of rubber *Replanting subsidy to be increased to Rs 100,000 per hectare Foundry Industry *A cess of 25 percent on export of ferrous and non-ferrous metals. Prawn Farming *Rs 20 m. for immediate infrastructure rehabilitation work and environment protection. *Removal of VAT on Shrimp feed Construction Industry *Increase the capital of Construction Industry Guarantee Fund to Rs 500 m. *Cess of 0.25, 0.5 and 1 percent from small, medium and large contractors will be charged for the fund while the Government will contribute Rs 250 m. *Establish a Academy for Advanced Construction Training. Fuel Subsidy *Exempt leasing of three wheelers from VAT. *Concessional funding for three wheelers. Export Development Incentive schemes *incentive scheme for non traditional exports Apparel Industry *Incentives for productivity development * Incentives for products design *backward linkage Alternative energy development *All inclusive tariff rate of US$ 0.06cts per unit for small hydropower sector Incentives for fishermen *Special loan scheme for small and medium scale fishermen. Modernization of Small and Medium Paddy Mills *Implementation of a special credit line by the SME bank. Revenue measures *VAT *Basic commodity rate of 5 % for essential food items *Luxury rate of 18% for selected consumer items *Standard rate of 15% for general items Reduce *Vat on sugar, dhal, potatoes, onions, dry fish, milk powder, vegetables and chillies from 15% to 5%. Increase from 15 -18% liquor, air conditioners, refrigerators, washing machines, TV sets and antennas, cameras, Jewellery, motor vehicles other than three wheelers and passenger buses and services such as hotel services for wedding receptions and such other kinds of receptions including hiring of halls. *Gems and gold which is currently exempt will be taxed at the rate of 15%. Income Tax exemption on agriculture *Income/profit exempt from cultivation of land with plants of any description and sale of such unprocessed products for a period of five years from January 2005. Removal of Income tax exemption from sale of *Remove exemption of tax on income earned from the sale of gems, gold and jewellery. *Income earned from export of gold gems and jewellery exempt from income tax. Personal Income Tax *Tax free allowance of any individual to remain at Rs 300,000 *The next 300,000 to be taxed at 5%, the next 200,000 at 10%, the next 200,000at 15%, the next Rs 200,000 at 20% and the next 200,000 at 25% and the balance income at 30%. Compensation paid under VRS or Retrenchment scheme *Tax free allowance under VRS/ retrenchment limited to Rs 2 m. Withholding tax on interest *Withholding tax on corporate debt removed while the final tax is retained. Economic Service Charge *ESC reduced to 0.5% for wholeseale and retail trade. |
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