Budget 2012 - LIVE

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.

econ wrote:

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.

Genting wrote:Depreciating rupee is really good. Rupee has been stuck around 110 -120 almost 5 years.
True, due to that inflation has been controlled. However exports have been adversely effected due to this all this time.

The question is "is 3% enough?"

sriranga wrote:To read full Budget 2012 Speech, please find the link below.

http://www.treasury.gov.lk/depts/fpd/budgetspeech/2012/bgtspeech2012-eng.pdf

econ wrote:depreciation of rupee further increase the price of oil. this affect all good and service prices.

Academic wrote:

econ wrote:depreciation of rupee further increase the price of oil. this affect all good and service prices.

Gov did last fuel price increase when oil price in the world market was declining in response to expected global economic slow down. So IMHO gov may not go for another price increase as they did the adjustment for rupee depreciation in advance.

Kumar wrote:

Academic wrote:

econ wrote:depreciation of rupee further increase the price of oil. this affect all good and service prices.

Gov did last fuel price increase when oil price in the world market was declining in response to expected global economic slow down. So IMHO gov may not go for another price increase as they did the adjustment for rupee depreciation in advance.

Please read this
http://forum.srilankaequity.com/t12037-fuel-price-increase#80083

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?

sriranga wrote: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