Budget 2019: A Basic Breakdown
It’s that time of the year again – a brand new financial year, and a brand new government budget to go with it! On the 5th of March 2019, Hon. Mangala Samaraweera (the Minister of Finance of Sri Lanka) unveiled to us the budget set forth for the financial year of 2019, under his theme “Enterprise Sri Lanka: Empowering the People and Nurturing the Poor “.
Missed the big announcement? Not to worry – Simplebooks is more than welcome to fill you in on the details.
Here’s a basic breakdown of this year’s budget ;
Travel and Tourism
- The NBT (Nation Building Tax) charged on foreign country receipts of specific hotels that are registered under the Sri Lanka Tourism Development Authority(SLTDA) will be exempted.
- It will be made mandatory for travel agents to remit funds to hotels in US Dollars when invoiced in US Dollars.
- To promote Sri Lanka as a preferred destination in International Go Kart Racing, the Customs Import Duty (CID) and CESS on Go Karts will be removed.
- The Economic Service Charge (ESC) applicable for export sectors (which are subject to Corporate Income Tax of 14%), will be reduced to 0.25%.
- Starting from the 1st of June, the entrance fees at National Parks and Cultural Sites will be reduced by 50% for international tourists with student identification(or under 18 years).
- Foreigners who invest USD 400,000 or more in condominiums will be entitled to residential VISA valid for 3 years.
- From the 1st of April 2020 onwards, any online booking/reservation website will be allowed to register a hotel offering more than 5 rooms per property only if said hotel/establishment is registered under the SLTDA.
- Applicable CESS rates will be reduced in support of the hotel sector.
- The “Scholarships for Educational Excellence” Fund will help students with the best results to study in exemplary universities abroad.
- For the development of in-land school infrastructure, a total of 32,000Mn will be allocated.
- In promotion of the training of Tamil language teachers, a total of 400Mn to be allocated.
- 25,000Mn has been allocated to meet the infrastructure gaps at in-land universities.
- 200Mn has been allocated for the “My Future” loan scheme which will enable students to pursue an undergraduate education at non-state universities.
Employees and Workforce
- To empower the female workforce, legislation will be introduced that enables flexible working hours, as well as work from home concepts for women.
- Financial assistance will be provided to establish day care centres for children of working mothers.
- Tax concessions will be granted to companies that allow 3 months of maternity leave.
- 4,320 Mn has been allocated to increase the allowance of the differently-abled to Rs.5,000/- per month.
- 300Mn will be allocated for the training of 1,000 unemployed individuals(mostly Arts graduates) through one-year internships in IT-BPM, KPO firms, where 50% (or up to a maximum of Rs.25,000/-) of the monthly salary, will be borne by the government(for up to 12 months).
- 300Mn allocated to help CIDA train workers with skills required by the construction industry.
- 1,000 luxury buses to be introduced for city rides, along with 250 additional SLTB buses.
- Starting April 1st 2019, the expressway toll will be increased by 100 during peak hours.
- The private sector will be allowed to lease/rent railway carriages of 4 main lines.
- A loan scheme will be introduced, which will support three-wheeler drivers to switch to environmentally friendly electric three-wheelers and small cars, where the government will bear up to 75% of the interest rate.
- 400Mn has been proposed for the setting up of modern climate-controlled warehousing facilities in Katunayake, Embilipitiya, Jaffna, and Keppetipola.
- The “Diri Saviya” Loan Scheme will be extended to support those in small scale animal husbandry and manufacturing activities.
- It will be made mandatory for all Cinnamon Exporters to be subjected to certified quality control testing, at the point of export.
- A further 2,410Mn has been allocated to complete the canals and headworks of 7 major projects in 2019, which will directly benefit almost 21,000 families engaging in Agriculture.
- The allocation for the “Gamperaliya” project has been increased from 200Mn to Rs.300Mn per electorate, where a total of Rs 48,000 Mn has been portioned out.
- 2,000Mn will be allocated for the “Sukitha Purawara” town development program.
- The “Ruwanpura Expressway” project will be commenced.
- 5,000Mn will be allocated for the Colombo City Light Rail Transit (LTR) project.
- For the development and maintenance of Colombo, a further 1,000Mn will be allocated.
- Foreign construction companies will not be allowed to bid for government projects, unless they are fully foreign-funded, or is in a joint venture with a local company.
- 1,000Mn has already been allocated for the “Nilwala Eliya” Model Park and Mega Zone, which will be completed in 2019.
- 4,000Mn proposed for the provision of houses with sanitation facilities, which is said to be completed within two years, benefitting almost 1 million Sri Lankan citizens.
- To house women with minor criminal offences, 50Mn has been proposed to establish a facility for training and development of productive livelihood skills.
- 400 Mn will be allocated for the Export Market Access Program and Rs.250Mn will be allocated for the National Export Strategy – which entails upgrading technical facilities for export product development, and import quality testing.
- 8,000Mn allocated for the construction of houses under the Urban Regeneration Project (URP).
- 10,900Mn allocated for flood and drainage management within Colombo.
Tobacco and Alcohol
- The price of a cigarette will be increased by 5.
- Starting in June 2019, the manufacture of cigarettes will be liable to an NBT.
- The production tax on hard liquor (750ml bottle) will be increased by 63, while that of a can of beer (330ml) will be increased by Rs.9.
- Several schemes will be introduced for the conservation of mangroves.
- Community-based “Green Clubs” will be established in every Divisional Secretariat, consisting of volunteers (mostly students) to expedite the planting of 2.5 million trees, the cleaning of beaches, separation of waste, etc.
- 600Mn will be allocated for the development of the Suwaseriya Ambulance Program.
- 1,625Mn has been allocated to strengthen primary health-care units in several provinces.
Banking and Finance
- In support of first-time home buyers(especially young couples of middle-income backgrounds), the Government will launch a concessionary loan up to 10 Mn, at a 6% interest rate, with a repayment period of 25 years called the “Home Sweet Home” Loan.
- The “Sihina Maliga” loan scheme will cater to migrant workers, (who are registered under the Foreign Employment Bureau and is currently working abroad) will be able to obtain a loan of10Mn for which the government will bear 75% of the interest cost.
- The5% NBT will replace the 2.5% Stamp Duty on all foreign transactions made using credit or debit cards.
- A personalized number plate can be purchased at1 million each.
- The import duty on luxury vehicles will be revised.
- The 200% cash margin set on imports will be removed for vehicles.
- The production tax on 70 KV electric vehicles reduced by Rs 175,000.
- The production tax on petrol vehicles has also been increased accordingly ;
For vehicles less than 800cc, it will be increased by Rs. 15000
For vehicles less than 1000cc, it will be increased by Rs. 175,000
For vehicles less than 1300 cc, it will be increased by Rs. 500,000.
- Amendments are said to be introduced to the inland revenue act.
- A new customs act is said to be introduced.
- 100Mn is to be allocated for the strengthening of the Bribery Commission.
And there you have it – a basic breakdown of the 2019 budget. What do you think of this year’s budget? Let us know in the comments below.