ECONOMYNEXT – Sri Lanka will phase out some import taxes which made external trade complex and incorporated them to standard import duty, according to a budget presented by President Ranil Wickremesinghe.
High border taxes gave large profits for politically connected businesses at the expense of weaker sections of society while profits to protect the farming lobby and grain collectors including maize contributed to malnutrition among poor children, critics say.
A CESS tax, introduced in a misguided effort for ‘export protection’ and the Port and Airport Levy, another border tax will be phased out, President Ranil Wickremesighe said in a budget for 2023.
“In order to promote the manufacturing industry, to remove the existing barriers to international trade, to provide the necessary incentives and facilities for local industries and projects including agriculture, CESS levy will be eliminated on phased basis in three years commencing January 01,
2023,” President Wickremesinghe said.
“For Ports and Airports Development Levy, I suggest to phase out completely in five years.”
gave large profits for politically connected businesses and farming lobbies at the expenses of the weaker sections of society,
Standard Customs Import Duty which is now at 0, 10 and 15 percent will be raised to 0, 15 and 20 percent from January 01, 2023.
“Relevant work in this connection is being done to introduce a Trade Adjustment Program as well,” he said.
“However, the proposed tax policy will be implemented in such a way that it does not interfere with CESS levy on agriculture-based value-added industries.”
Removing agriculture protectionism in Vietnam has made the post liberalization taller than their parents who grew up under protectionism, while making the nation and export powerhouse.
“Compared to a similar study in 2010, the average male height has increased by 3.7 cm from 164.4 cm, and the female height has grown by 2.6 cm from 153.6 cm,” Vietnam media reported in 2021.
“Vietnamese people are only inferior to Singapore, Malaysia and Thailand in terms of the average height of young men and women.”
Vietnam suffered severe monetary instability in the 1970s and 1980s, due to Sri Lanka style monetary policy as economists printed money to keep rates down, destroying their currency, which also hit incomes and made people poor.
Singapore, Malaysia and Thailand, have had currency boards or very good pegs.
A CESS on primary agriculture exports, such as cinnamon will allow value added producers to exploit farmers by denying them a market price available to competitors in other countries.
A CESS on industrial raw materials or gems will help industrialists or jewellers to exploit miners. (Colombo/Nov15/2022)