Budget 2012 - LIVE

– Increase in vehicle registration charges
Vehicle registration charges are to be revised and there will be an increase for the luxury vehicle tax. There will be a 50% tax cut for vehicles in the tourism industry and a 50% tax reduction on tyres for buses and lorries.
http://www.dailymirror.lk/news/14903-budget-2012-increase-in-vehicle-registration-charges-.html

Nov 21, 2011 (LBO) - Buses imported for tourism will be freed from value added tax and duties on vehicles imported for airport taxi services will be halved, President Mahinda Rajapaksa told parliament.

Presenting the 2012 budget, Rajapaksa said airport taxi owners could use the facility to replace their old vehicles.
However the taxis will have to conform to standards set by the airport authority.
http://www.lbo.lk/fullstory.php?nid=1704404560

United National Party Parliamentarians walked out of the parliament while President Mahinda Rajapaksa was presenting the 2012 budget proposals in Parliament.
President Rajapaksa who is also the finance Minister is currently presenting the 2012 budget proposal in the Parliament.
The presentation of the budget started at around 2 pm this evening.
http://www.news360.lk/politics/deleted-mps-walk-out-of-the-parliament-while-president-rajapaksa-was-delivering-the-budget-speech

President Mahinda Rajapaksa presenting the Budget for 2012 proposed to depreciate the value of the rupee by three per cent in line with the regional currencies.
http://www.dailymirror.lk/news/14904-budget-2012-devalue-rupee-by-3.html

Nov 21 (Reuters) - Sri Lankan President Mahinda Rajapaksa is presenting the 2012 budget to the island nation's parliament.

Following are highlights of his speech:

RUPEE DEVALUATION

"We need to reduce the import cost and increase export revenue. When our currency has strengthened, our trading partners' currencies have depreciated. So I propose to devalue the currency by 3 percent with effect from today."

ECONOMIC GROWTH:

"We have been able to maintain the growth rate at 8 percent in 2011, the same as 2010."

The government initially had forecast growth of 8.5 percent in 2011, but trimmed the forecast to 8.3 percent last month.

"In the Northern region, it is reported that the growth is 23 percent, well beyond 8 percent." Last year, economic activity in the former war zone -- which was under the control of Tamil Tiger separatists for decades until the Sri Lankan military defeated them in 2009 -- grew at a 14.2 rate.

NO ELECTIONS IN 2012

"I will not give any elections next year.

The Northern Provincial Council is the only remaining provincial government that has not had elections.

Devolution of power to the provincial level in the Tamil-dominated north is a crucial demand of Tamil parties negotiating with the government over political concessions, with the backing of several Western governments.

TAXES

"In addition to rice, we need self-sufficiency in green grams, peanuts, ginger, and corn in order to achieve food security. So I propose a high cess on imports of these products."

"Vehicle registration charges will be revised while they will be increased for luxury vehicles in order to increase revenue of provincial councils." He also said tourism vehicle import duties will be cut by 50 percent

INFRASTRUCTURE

"We have allocated 30 billion rupees ($271.8 million)for the interprovincial road network."

"We can be the regional sports hub and that can help to strengthen our economy. I propose 500 million rupees for development of infrastructure complexes and all sport goods will be tax-free in order to encourage sports."

TOURISM VISA FEES

"We have decided to impose a vise fee of $10 per person from the SAARC (South Asian Association for Regional Cooperation) region countries and $20 from the other regions' visitors. There won't be any charge on children to encourage family tourism. Tourists who spend a minimum of 48 hours also won't be charged. This will give an additional revenue of 2 billion rupees."

DEFENCE SPENDING

Of 230 billion rupees allocated to defense, 203 billion or 88 percent will be spent on salaries, food and uniforms.
http://www.reuters.com/article/2011/11/21/srilanka-budget-idUSL4E7ML1BB20111121

sriranga wrote:

RUPEE DEVALUATION

"We need to reduce the import cost and increase export revenue. When our currency has strengthened, our trading partners' currencies have depreciated. So I propose to devalue the currency by 3 percent with effect from today."

What is the effect of rupee devaluation to the economy? And is it the best move? Please enlighten me?

Rs. 100,000 grant to every third child of police personnel – President

President proposed a Rs. 100,000 grant to every third child born to police personnel in Sri Lanka a short while ago delivering the 2012 budget speech

lol... President is encouraging to have more kids.. good solution to increase the population...

godswen wrote:

sriranga wrote:

RUPEE DEVALUATION

"We need to reduce the import cost and increase export revenue. When our currency has strengthened, our trading partners' currencies have depreciated. So I propose to devalue the currency by 3 percent with effect from today."

What is the effect of rupee devaluation to the economy? And is it the best move? Please enlighten me?

it'll boost exports

A 10% salary increase for government servants and security forces personnel will come into effect from next yea

sriranga wrote:
TAXES

"In addition to rice, we need self-sufficiency in green grams, peanuts, ginger, and corn in order to achieve food security. So I propose a high cess on imports of these products."

high cess on corn imports, this can be a negative impact for poultry farms.

Finally, what would be the impact to CSE and to different sectors ?
My guess is budget is good for plantation, tourism, exports due to rupee depreciation

depreciation of the rupees may make exports cheaper and foreign direct investments (FDI) more attractive. Considering whats happening in the world I think its a good decision to depreciate the rupee.

India already done! Though late a good decision!

I am moving this topic to the Stock Market 'Talk Section'

Does anyone if 3% is a substantial percentage in real world terms. It doesn't seem like a lot.

.

where did u get that

chamith wrote:

This is last year's highlights. Daily Mirror's fault confusing people.

chamith wrote:

This is last year-2011 budget, Not the today one

Nov 21, 2011 (LBO) - Sri Lanka will give tax holidays between 4 to 6 years to companies investing between 50 to 300 million rupees in export and import substitution businesses, President Mahinda Rajapaksa said.

The move will allow small and medium enterprises to benefit from investment incentives, President Rajapaksa told parliament during a budget speech.
Firms in agriculture and information technology will have a 25 million rupee threshold.

For larger enterprises investors between 300 to 2.5 billion rupees a 6 to 12 year tax holiday would be given, Taxes on machinery imports for expansion will be reduced he said.
http://www.lbo.lk/fullstory.php?nid=53748401

Nov 21, 2011 (LBO) - The Sri Lankan government is to take back 37,000 acres of unused land from regional plantations companies and distribute it to small farmers, President Mahinda Rajapaksa said.

The land is to be distributed on rent among small holders at the rate of two acres each, Rajapaksa told parliament while presenting the budget for 2012.
He said the government had done surveys of plantations and identified the land that had been lying unused since the estates were privatised in 1992 with the land leased and estate management given to regional plantations corporations.
http://www.lbo.lk/fullstory.php?nid=1687009056

I am sorry guys i didnt know. i got this from DailyMirror.

Where else can i get the info ? Is the budget reading over now ?

Sri Lanka to give tax holidays to smaller enterprises
Nov 21, 2011 (LBO) - Sri Lanka will give tax holidays between 4 to 6 years to companies investing between 50 to 300 million rupees in export and import substitution businesses, President Mahinda Rajapaksa said.

The move will allow small and medium enterprises to benefit from investment incentives, President Rajapaksa told parliament during a budget speech.
Firms in agriculture and information technology will have a 25 million rupee threshold.

For larger enterprises investors between 300 to 2.5 billion rupees a 6 to 12 year tax holiday would be given, Taxes on machinery imports for expansion will be reduced he said.


The necessary changes will be made into revenue and strategic investment laws, President Rajapaksa said.
The state will also finance new university course to help raise the standards and technology in leather, textiles and jewelry industries.

Sri Lanka raises annual 'luxury taxes' on cars
Nov 21, 2011 (LBO) - Sri Lanka has raised annual taxes on 'luxury' cars of up by between 20,000 to 50,000 rupees a year with new vehicles with engine capacity over two litres, being charged the highest rates of 150,000 rupees.

Sri Lanka's budget or 2012 said 'luxury' diesel cars over 2.5 litres engine capacity and petrol cars over 2.0 litres will be charged a 150,000 fee in the first year up from 100,000, and 100,000 in the second year up from 78,000.
For semi luxury diesel cars and jeeps with engines of 2.2 litres and petrol cars over 1.8 litres 2.2 the first year fee tax has been raised to 60,000 rupees from 50,000 in the second year to 50,000 from 39,375 rupees and in the third year to 40,000 rupees from 34,000.

For dual purpose diesel cabs over 2.2 litre engines the rate has been raised to 40,000 from 20,000 in the first year and from 15,750 to 25,000 in the second year and from 13,600 to 20,000 in the third year.


Fees for new registrations of motorcycles has been raised to 2,000 rupees from 1,500 and for three wheelers to 2,500 from 2,000 and three wheeler vans to 3,000 from 2,500 rupees.
For motor cars with engines below 1.6 litres the free has been raised to 15,000 rupees from 10,000 and for larger cars to 20,000 rupees from 20,000.

For prime movers and dual purpose vehicles the new registration fee has been raised to 15,000 rupees from 10,000 and for forklifts from 15,000 to 20,000 rupees.

Quibit wrote:depreciation of the rupees may make exports cheaper and foreign direct investments (FDI) more attractive. Considering whats happening in the world I think its a good decision to depreciate the rupee.

it will benefit exports. but sri lankan exporters are importing most of the raw materials from abroad. thus their cost increase as well. so not much impact on exporters.
depreciation of rupee further increase the price of oil. this affect all good and service prices.

The increase in tax on corn will impact poultry farmers however BFL is growing its own maize and they should be able to reduce the impact. Also local corn production will go up and soon poultry farmers will not have to depend on imports. However the cost of local corn may be expensive like most other vegetables/cereals produced in Lanka. Must follow BFL results in the next few quarters.

The vehicle taxes not increased but instead registration fee and luxury tax increased which wont impact the owners of these cars too much. This maybe to keep the economy at fast pace and also the government loses revenue with increasing vehicle taxes. This also gives a shine to the budget. Reduction of tourist related vehicles is a good move and it is high time airport taxi's are made more safe and new vehicles added. However on should note that with the haphazard policy changes, vehicle taxes can be just increased overnight without prior warning which brings more hardship to public. It must be noted that new vehicle registrations is however stabilising after hitting high levels in June/July. Keep an eye on DIMO/UML/COLO.

Cheers!