Sri Lanka Slaps Tax On Foreigners, Raises Defense Budget

Discussion in 'Subcontinent & Central Asia' started by AVERAGE INDIAN, Nov 23, 2013.

  1. AVERAGE INDIAN

    AVERAGE INDIAN EXORCIST Senior Member

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    COLOMBO — Sri Lanka slapped a new property tax on foreigners and increased telephone charges in a new budget on Thursday that also included another rise in defense spending four years after the civil war ended.

    President Mahinda Rajapakse, who is also the finance and defense minister, told parliament he was raising the telecom tax from 20 percent to 25 percent to rake in more revenue from the rapidly growing industry.

    Rajapakse introduced a 15 percent tax on land leased to foreign nationals, slapped a two percent tax on banks and raised duties on the import and export of several commodities.

    The estimated revenue from the new measures for 2014 was not immediately clear.

    “We will not allow any land to be sold outright to foreigners,” Rajapakse told parliament. “We will charge 15 percent up front on the value of lease agreements with foreigners. They can lease, but not buy land in Sri Lanka.”

    A treasury source said foreigners who already own land will not be affected, but they will not be allowed to transfer ownership to non-nationals.

    The government had earlier this year announced a complete ban on the sale of real estate to foreigners.

    In recent years, foreigners had snapped up prime locations along the island’s southern coast, as well as heritage sites where Portuguese, Dutch and British colonial rulers had their forts.

    Tourism has picked up rapidly after troops defeated Tamil Tiger rebels in May 2009 to end 37 years of ethnic bloodshed which according to the UN claimed at least 100,000 lives.

    The government allocated a record 253 billion rupees ($1.95 billion) for the defense ministry, despite international pressure to scale down the military after the war.

    The 2014 defense budget is marginally higher than the 249 billion rupees budgeted for this year.

    The government has not explained the increase, but official sources said the sustained high defense spending included repayments of loans taken out to buy arms at the height of the fighting.

    Defense and police together account for nearly 12 percent of the government’s total estimated spending of 2.54 trillion rupees in 2014, marginally lower than the 2.56 trillion this year.

    Rajapakse told parliament Thursday that he expected the economy to grow 7.5 to 8 percent in calendar 2014.

    Sri Lanka Slaps Tax On Foreigners, Raises Defense Budget | Defense News | defensenews.com

    wow the lankans are soo desperate
     
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  3. Free Karma

    Free Karma Senior Member Senior Member

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    In a way a densely populated country with small amounts of land, land becomes power, and power going to foreign hands is not a good thing, not a bad move tbh.

    But as far as the other taxes go....dont understand, I saw a lot of videos asking people to invest in SL and what not, and then they do this, strange.
     
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  4. Ray

    Ray The Chairman Defence Professionals Moderator

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    Must raise more taxes.

    It is important to ensure that SL looks at development and money inflow beyond tourism!

    The Navy with so many Naval Commands and just one ship in each, requires at least one more to appear to be somewhat of a truncated Command, if indeed it cannot be termed as a Command in pure Naval parlance.
     
  5. jmj_overlord

    jmj_overlord Regular Member

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    but sir, won't these high taxes deter the investors from investing in the country ?
     
  6. Ray

    Ray The Chairman Defence Professionals Moderator

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    Yes, it will.

    It will deter even the SL men themselves.

    But money to buy toys is important.
     
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  7. ladder

    ladder Senior Member Senior Member

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    There might be a exception clause for Chinese investors
     
  8. Ray

    Ray The Chairman Defence Professionals Moderator

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    There is no Chinese investors.

    They are all proxies of the Chinese Govt and the Princelings.
     
  9. t_co

    t_co Senior Member Senior Member

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    This doesn't make a lot of sense. I hope the Chinese ambassador can give Rajapakse some hardheaded macroeconomic advice soon.

    Foreign investment is the cheapest way to rebuild oneself following a civil war. When the economy picks back up, asset prices rise again, and the foreign investors have put in tons of work, then it makes sense to start milking them for all its worth. Until then, SL should be friendly and welcoming.

    Patience is most important virtue in a statesman.
     
    Last edited: Nov 24, 2013

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