On 21 November 2011, the Sri Lankan Minister of Finance and Planning presented the budget for 2012 in the Parliament.
The following changes arerelevant to international commerce:
- Income Tax concessions and additional tax deferment provided for Strategic Import Replacement Enterprises who invest into locally produce cement, steel, pharmaceuticals, fabric or milk powder. Furthermore, these benefits are extended to enterprises that export more than 75% of their output.
- Tax exemption on royalties received from abroad.
- Tax concessions on income from exported tea.
- Tax exemption on yarn production to facilitate local handloom/fabric manufacturing.
- Tax introduction on imports of fabric for domestic consumption.
- Value Added. Tax (VAT) exemptions on imports of 9 categories of products.
- VAT exemption on 5 categories of locally manufactured products.
- VAT exemption on imports of 17 categories of products.
- VAT exemption for raw materials used for manufacture of spectacles and spectacle frames in order to protect local industries.
- Exemption of nation building tax on the imports of 13 products.
- Exemption of nation building tax on sales of any goods to exporters.
- Cess on imports of 8 categories of products used as raw materials by local manufacturers has been removed/reduced.
- Cess on imports of 20 categories of products has been reduced/removed.
- Cess has been increased/imposed on exports of 14 items.
- Customs duty reduction/exemption on 27 categories of products.
- Customs duty increase/introduction on 2 categories of products.
- Exemption from Ports and Airports Development Levy on imports of 8 categories of products.
- A unified Special Commodity Levy introduced for 8 items in lieu of all the applicable taxes.
- Duty exemption on any imports by Sri Lankan Air Lines Limited, Air Lanka Catering Services Ltd., and Mihin Lanka Pvt. Ltd.