COLOMBO: Sri Lanka slapped a new property tax on foreigners and increased telephone charges in a new budget yesterday that also included another rise in defence spending four years after the civil war ended.
President Mahinda Rajapaksa, who is also the finance and defence minister, told parliament he was raising telecom tax from 20 to 25 percent to rake in more revenue from the rapidly growing industry. Rajapaksa 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.
“We will not allow any land to be sold outright to foreigners,” Rajapaksa 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.
The government allocated a record Rs253bn ($1.95bn) for the defence ministry, despite international pressure to scale down the military after the war. Rajapaksa told parliament that he expected the economy to grow 7.5 to 8.0 percent in calendar 2014.
AFP
