BUSINESS

A closer look at Budget 2014

Bella Dalima

The government has decided to increase the cost of living allowance of state sector employees by Rs.1200 according to the budget proposals that were announced on Thursday.

The 68th budget of independent Sri Lanka and the 9th budget of the Alliance Government was presented by President Mahinda Rajapaksa.  It was also proposed in the 2014 budget to provide a maximum of Rs.1250 as pensions to farmers over the age of 63. Salaries and allowances given to a number of sectors have been increased through the 2014 budget. The government also proposes a monthly intern allowance of Rs.750 for medical interns engaged in hospital services. The 2014 budget also proposes that the annual uniform allowance for nurses, family health workers and other staff be increased to Rs.1500 while the on call duty allowance for paramedical staff be increased by Rs.150 per month. The government also plans to grant an allowance of Rs 15,000 to district secretaries, Rs.5000  to divisional secretaries and Rs. 3000 to planning directors and chief accountants attached to district secretariats to incentivise them to coordinate rural centric work and to promote better expenditure management and supervision at district level .

The budget for next year also proposes that a monthly allowance of Rs.300  be granted for field level officers in agricultural extension services, veterinary services, irrigation and wildlife. It is also proposed that these field level officers be provided motorcycles on a five-year lease basis .. The government has decided to continue with its fertiliser subsidy, and also to provide a once a year subsidy of 5000 rupees per acre to tea small holders, in order to improve the condition of their lands.

The budget for 2014 also makes allocations import 20,000 high quality cows and to develop 125,000 model home gardens through the Divineguma programme. It is also proposed to grant Rs.10,000 to the best Divineguma home garden in each Grama Niladari division. The budget also proposes the implementation of a micro enterprise credit guarantee scheme for women which will provide working capital loans of up to Rs.250,000 without requiring security. It also proposes that Divineguma entitlement cards be issued to small entrepreneurs subject to a payment of Rs.500.

The 2014 budget also proposes to extend the 2% nation building tax applicable to the banking sector to all banks and financial institutions. In order to prevent leakages associated with under invoicing during the importation of used vehicles, the government proposes revise the customs-based taxes in order to prevent under valuation. The government also proposes to fix the tax free threshold applicable for VAT on supermarket scale retail trade at 250 million per quarter, while the telecommunication levy will remain fixed at 25% .. The government also plans to reduce taxes imposed on fishing equipment as well as engines used for fishing vessels. It also plans to exempt small traders engaged in business with a monthly turnover less than Rs.50,000  from all levies imposed by local authorities.

The government also abolished the licence scheme that was put in place to transport locally manufactured wooden goods. The budget proposes that a sum of one million rupees be granted to every Pradeshiya Sabha on a monthly basis in order to maintain infrastructure facilities.  It also noted that a 10% discount on all taxes will be given to professionals who have brought in foreign exchange of over 100,000 dollars for three consecutive years, when importing vehicles. The government has formulated new laws to protect Sri Lankan land resources from outright transfers to foreign ownership. From this year onwards foreign nationals can have access to state and private lands only through long term lease arrangements. A 15% upfront tax will be imposed in the event of lease of a state or private land to foreigners.

The government also plans to strengthen the Sri Lankan Airlines by providing 150 million US dollars. It also plans to allocate 50 million US dollars for Mihin Lanka in 2014. The 2014 budget proposes a half tax holiday for a period of three years for any company in the banking , finance, insurance and manufacturing sectors who have listed their shares in the Colombo Stock Exchange in 2014. The government believes that the time has come to encourage professionals to develop housing schemes to suit their needs. thereby the government plans to recognise loan repayments of up to Rs.50,000  per month for such house building arrangements to be treated as a special qualifying payment in the payment of taxes.

The 2014 budget also proposes the construction of three new housing schemes in the greater Colombo area to solve the housing problems of police officers workings in Colombo. The government through the 2014 budget also plans to construct housing complexes with 50,000 housing units to replace poor quality housing in the plantation sector..

 

 

 

 

 

 

 

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