Nov 08, 2012 (LBO) - Sri Lanka will cut taxes on racing cars and give valued added and turnover based tax relief to sports related economic activities according to a budget for 2013 presented to parliament.
President Mahinda Rajapaksa who is also finance minister said in a prepared budget speech that the foreign income from sports activities is estimated to be around 50 million US dollars a year and it was expected to be raised to 500 million US dollars by 2016.
"The recent international sports events conducted in our country demonstrated great potentials in developing a sports economy," President Rajapaksa said.
"This requires us to sponsor all season sport activities to attract international sports and stakeholders participating in such events."
Excise duty on imported racing cars and go karts will be axed.
The tax cut for racing cars come shortly after taxes on cars used by ordinary Sri Lankans were jacked up.
A restriction on deducting 25 percent of advertising expenses will not apply to sponsorship of international sports events approved by the minister to sports. The concession will be applicable from August 01, 2012.
The supply of hotel accommodation to any sportsman, organizer of any sports event or sponsor arriving in Sri Lanka for participating in any sport event or activity in connection with sport will be exempt from VAT.