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Saturday April 20th, 2024

Sri Lanka publishes trade taxes for import substitution economy, new duty list

ECONOMYNEXT – Sri Lanka has published a series of value-based and per unit cess taxes to limit competition from imports for domestic producers and keep prices up, as part of an import substitution economy.

A revised list of import duties were also released with a maximum rate at 15 percent and some items coming in at zero duty. Over 2,575 items and sub-items came under the cses taxes in a kind of negative list layer on top.

Some items could be imported sans the tax under permits or approval from the relevant ministry and the Director General of Customs.

Many of the businesses had been in operation for decades lobbying for continued protection indefinitely. Some are monopolies or oligopolies in their areas of business.

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Sri Lanka protectionism to continue, three band tariff for some

However large investors would also be allowed to bring in duty free items.

Motor cycle tyres are taxed at 30 percent or 180 rupees a kilogram, whichever is higher.

Bicycle tyres are taxed at 30 percent duty or 210 rupee cess. Three wheeler tyres are also taxed at 30 percent r 170 rupee per unit cess.

Shoes are taxed at 1,000 rupees a pair while uppers are taxed at 920 rupees and a 15 percent duty.

Leaf springs a heavy item is taxed at 15 percent or 17 rupees a kilogram whichever is higher. However raw steel is allowed in as an input.

Radiators are taxed at 40 percent or 2,400 rupees a unit.

Several grades of RSS and crepe rubber are taxed at 40 rupees kilogram.

Tiles are taxed at 50 percent or 183 rupees a unit. Squatting pans are taxed at 15 percent and 12 rupees. Tableware is taxed at 15 percent or 115 rupees a kilogram. Granite is taxed at 50 percent or 40 rupee a kilogram.

Paints are taxed at 200 rupees a kilogram. Nails are taxed at 15 percent or 165 rupees a kilogram.

Sanitary towels and tampons are taxed at 15 percent.

Lipstick is taxed at 4000 rupees a kilogram, eye-shadow at 4,700 rupees. After-shave is taxed at 700 rupees and deodorants 800 rupees.

Shampoos are taxed at 1,000 rupees a kilogram.

Baby diapers at 15 percent. Fabrics are taxed at 100 rupees a kilogram and garments at 200 rupees a unit.

Many vegetables are taxed at 45 percent or 200 rupees a kilogram. Some exported teas are taxed at 15 percent.
Powers had been given to allow the import of raw material with permission from secretary to the relevant ministry such as industries or agriculture and the Director General of customs.

Raw materials for fashion jewellery, drugs or medical devices registered at the National Medicines Regulatory Authority could be imported.

In Sri Lanka some imported items are subject to import duty, cess, port and airport levy and value added tax on top.

Items coming under special commodity levy are subject to a simple single tax.

New post budget import duties were also published.

Many items are under zero duty and some are at 4.5 or 5 percent subject to a maximum of 15 percent.

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Sri Lanka discussing giving extra land, water for Chinese oil refinery

ECONOMYNEXT – Sri Lanka is in discussions with China’s Sinopec to give extra land and assure water supplies after the company decided to expand the capacity of a planned oil refinery in Hambantota, Energy Minister Kanchana Wijesekera said.

“There are concerns on how the water supply is going to be provided for the refinery,” Minister Wijesekera told reporters Friday.

The refinery will need more land and also revise conditions in a Board of Investment agreement, he said.

Read more
Sinopec to double capacity of new refinery in Sri Lanka’s Hambantota

Recommendations and decisions from Sri Lanka’s side had already been sent and Sinopec is expected to revert back in May.

“We are hoping to sign the agreement once everyone has agreed,” Wijesekara said.

The principle agreements are expected to be signed by June, he said.

The refinery could sell up to 10 percent of its output in the domestic market.

“There is no commitment by the government to purchase anything,” Minister Wijesekera said. (Colombo/Apr19/2024)

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Sri Lanka rupee closes weaker at 302.00/50 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 302.00/50 to the US dollar in the spot forex market on Friday, down from 301.50/302.00 a day earlier, dealers said.

There was increased demand for dollars after the central bank bought 715 million dollars from forex markets. In the previous two months it was buying on average about 200 million US dollars, leaving market participants and bank in a ‘oversold’ position.

There were some official dollars sales Friday dealers said.

READ Sri Lanka rupee quoted wide to US dollar as peg inconsistencies flare up

Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed at 11.30/40 percent down from 11.35/40 percent.

A bond maturing on 15.09.2027 closed at 11.95/12.05 percent up from 11.90/12.05 percent.

A bond maturing on 15.12.2028 closed stable at 12.15/25 percent.

A bond maturing on 15.09.2029 closed stable at 12.30/40 percent.

A bond maturing on 01.10.2032 closed stable at 12.40/50 percent. (Colombo/Apr19/2024)

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Sri Lanka stocks close down, banks trade down

ECONOMYNEXT – The Colombo Stock Exchange closed down on Friday, data on its site showed.

The broader All Share Index closed down 0.38 percent, or 44.80 points, at 11,753; while the S&P SL20 Index closed down 0.53 percent, or 18.46 points, at 3,456.

Turnover was at 1.4 billion. The diversified financials (Rs366mn) and banks (Rs266mn) sectors continued to see selling pressure.

“This was possibly due to uncertainty around the bond discussions,” market participants said.

With the exception of Sampath Bank Plc (up at 77.50) all other banks traded down in the day. Commercial Bank of Ceylon Plc was down at 104.50, Hatton National Bank Plc was down at 188.50, and DFCC Bank Plc was down at 77.00.

LOLC Finance Plc saw the most trades and closed up at 6.40. Another LOLC company, Browns Investments Plc, also saw high traded volumes and closed up at 5.60.

Softlogic Capital Plc was up at 7.00, and Softlogic Holdings Plc was up at 11.20. A trading suspension imposed on SHL.N0000 was lifted effective today as the company submitted the annual report for the year ended 31st March 2023.

However, shares of the Company will remain in the Watch List “due to Qualified Audit Opinion and Emphasis of matter on going concern in the Independent Auditor’s Report in the Audited Financial Statements for the year ended 31st March 2022.”

Dialog Axiata Plc, which announced its merger with Bharti Airtel Thursday, saw its share price close up at 11.90.

“There was some traction on index heavyweights,” market participants pointed out.

Top contributors to the APSI included Aitken Spence Plc (up at 134.50), Ceylon Tobacco Company Plc (up at 1,245.25, and Lion Brewery (Ceylon) Plc (up at 1,048.50).

There was a net foreign inflow of 5 million. (Colombo/Apr19/2024)

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