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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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.

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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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