Finance Minister Ravi Karunanayake began the Second Reading of the 2016 Budget at 2pm today.
He pointed out that the budget is based on the policy statement delivered by Prime Minister Ranil Wickremesinghe on November 5.
Meanwhile, Karunanayake said that economic reforms were needed to change the negative impact of the former government of Mahinda Rajapaksa, including economic and foreign policy failures.
Karunanayake also said that this budget was unique since it was the first budget presented by a national government in Sri Lanka's history.
He said that special attention will be focused towards developing state enterprises which were neglected and to create more international trade. Meanwhile, the President was especially interested in agriculture sector, he added.
Karunanayake honoured members of armed forces for the end of war.
Despite the end of the war, the economy went down on a dangerous path due to Rajapaksa government's mismanagement, Karunanayake said. There are a lot of issues to be tackled, Karunanayake said.
He also called upon Sri Lankans to bring back the money deposited overseas.
Karunanayake spoke of the low percentage of tax income in government revenue. People's tax money should be invested intelligently, he pointed out.
Main Proposals
* SME - A regulatory authority for micro, small and medium sized enterprises
* Rs. 500 million allocated to support small and medium scale entrepreneurs
* Paddy prices: Certified price for Paddy. Keeri samba Rs. 50, Nadu Rs 38, Samba Rs 41 (per kilo)
* Local milk powder packet price will be reduced from Rs.325 to Rs.290
* Government to encourage value additions in the tea sector without compromising Ceylon Tea brand.
* Private sector encouraged to step into canned fish business. Canned fish prices will be set at Rs 125
* Life insurance scheme of Rs 1 million for fishermen
* Rs 1500mn allocated for each Grama Seva division for rural economic development
* 2 year tax exemptions for Tea and Rubber producers
* Government to encourage value additions in the Tea industry. Special committee to be established to resolve issues plaguing the tea industry
* Private sector encouraged to step into canned fish business. Canned fish prices will be set at Rs 125.
* Rs. 4000mn for wild life conservation and to minimize human-elephant conflict
* Rs 2000mn for the eradication of drugs and for child protection
* Gem auction to be held in Sri Lanka in April and October each year
* Government will introduce National Digital Identity card to set up national digital transaction system
* Export processing zones to be managed by Private management organisations
* Lubricant market to be liberalized
* Special tax concessions for organisations that bring businesses to under developed areas.
* No Super-gain taxes in the future
* Foreigners granted the opportunity to invest in Sri Lanka through regular banking channels
* New investment act to be enacted
* Exim bank(export-import bank) to be set up April 1, 2016
* 100,000 homes to be built in 5 years for slum dwellers. project will be funded by Government and the Private sector
* Rs. 500mn to be used to create a Land Bank which will digitally keep a track of state-owned lands
* All hotels should be registered with the Hotels Development Authority by June 2016
* Import taxes on garments, shoes, electronics to be revised
* Deep sea sand purification equipment to be imported at duty-free rates
* Public who choose to adopt Solar power will receive tax reliefs
* 100,000 homes to be built-in 5 years for slum dwellers. project will be funded by Government and the Private sector
* Valuation fees for vehicles revised. Motorbikes/Three wheelers – Rs.2500. All other vehicles – Rs 15000
* Salaries account to be introduced for all employees
* Divineguma bank to be linked to the National Savings Bank, Banks should not engage in leasing activities from 1st June 2016.
* Import duties on caravan carriages, yachts, jet skis, surf board and mini cruise boats to be reduced
* 5 day work week to be implemented
* Withholding Tax was withdrawn
* Rs. 4000 million allocated to create sanitary facilities in all schools around the country
* Import tax repealed for printed magazines, books and journals
* Interest-free loans for university students to purchase laptops. Free Wi-fi zones in all universities
* Mahapola University to be established in Malabe
* Market rate vouchers to be issued for student uniforms
* 5.41% of GDP allocated for the education sector
* New entrance road to Colombo Fort from Peliyagoda
* Rs. 1500mn allocated to renovate the Kelani Valley railway line
* New government sector workers to get a new pension scheme (effective from January 2016)
* Sri Lanka to head towards open skies policy. 3 internal airports to be set up in Digana, Badulla and Puttlam
* Salary anomalies in the police force to be resolved within 2 years
* Number of Police stations in the country to increase to 600
* 3 new cancer hospitals to be set up in Kandy, Matara and Nallur
* Rs 6500mn to be allocated to build 1000 Kidney Dialysis centers
* Prices of 11 essential goods to be reduced
* New entrance road to Colombo Fort from Peliyagoda
* Rs. 1500mn allocated to renovate the Kelani Valley railway line
* New government sector workers to get a new pension scheme (effective from January 2016)
* Sri Lanka to head towards open skies policy. 3 internal airports to be set up in Digana, Badulla and Puttlam
* Salary anomalies in the police force to be resolved within 2 years
* Number of Police stations in the country to increase to 600
* 3 new cancer hospitals to be set up in Kandy, Matara and Nallur
* English and Tamil teledramas, movies and advertisements exempt from taxation
* Tax code should be simplified and tax revenue should be increased to 18% of GDP by 2018
