Press briefing of Cabinet Decision taken on 2011-03-08

Proposed Legislation to Implement Proposals Announced in Budget

in keeping with the budget proposal - 2011, several changes with regard to finance, tax and investment related legislation are to be introduced in the form of amendments to the existing 14 Acts and with one new legislation. Some of the proposed Amendments to Existing Acts are as follows:

* Value Added Tax (Amendment) Bill (reduction of the VAT rate on financial services and on certain Goods and Services from 20% to 12% and introduction of a New VAT Suspension Scheme for exporters and deemed exporters)
* Economic Service Charge (Amendment) Bill (simplification of the rates scheduled and introduction of annual returns in place of quarterly returns)
* Stamp Duty (Special Provisions) (Amendment) Bill (to enable transferring of revenue collected by the Inland Revenue Department to the Provincial Councils)
* Debits Tax (Amendment) Bill (removal of the Debits Tax)
* Finance (Amendment) Bill (removal of the Social Responsibility Levy and Cellular Mobile Subscribers' Levy)
* Excise Ordinance (Amendment) Bill (to permit tapping of Palmyrah and Kithul Trees to encourage related domestic industry)

with the introduction of the above changes, the number of taxes payable by a person will get reduced, thereby resulting in a simplification of a tax system while also improving the effectiveness of the tax administration. The overall reform oriented tax rate revisions are expected to give an impetus to investment through tax savings. Cabinet approval was granted to submit the relevant fifteen (15) Bills in Parliament for approval.