Sri Lanka plans tax cuts for jewellery industry

ANNOUNCNG his budget proposals for 2007, Sri Lanka’s president and finance minister Mahinda Rajapakse lowered certain taxes on the jewellery industry, while imposing restrictions on jewellery imports in a bid to increase the country’s earnings and add value to the local jewellery industry.

The Port and Airport Development Levy on semi-precious stones, diamonds and gold was scrapped, while value-added tax was reduced from 20 per cent to 5 per cent. A 15 per cent cess was imposed on jewellery imports

Jewellery manufacturers will have to pay an annual registration fee of Rs.5,000 ($45) to support the development of technology for high value products. An economic service charge of 1 per cent will apply on local jewellery manufacturers, while in the case of exporters, the 1 per cent charge will apply on value addition.