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Targets 5.5% growth for 2021

Prime Minister and Finance Minister Mahinda Rajapaksa presenting the budget for 2021 yesterday in parliament said that the Government hopes to achieve 5.5% economic growth.

The Premier also said that to give more encouragement towards the development of local Agriculture, Fisheries and Livestock these three sectors will be exempted from income tax for the next 5 years.

“Sri Lanka should be more dependent locally rather than being depended on foreign products,” he said. Identifying the need for digitalisation he said that special emphasis would be made for the digitalization of the State sector.

“Government’s vision is a technology-based society and for this purpose, the government plans to establish five ‘plug and play’ technological parks across the country. PM also underlined plans to invest Rs 15,000 million to expand telecom services and achieve 100% coverage for 4G fibre broadband.

Telecommunication towers are to be built in State lands as a joint operation by the TRC and CEB with the help of local contractors towards meeting this target. In a bid to encourage local companies for stock market listing he said special tax concessions will be offered and a 50% income tax exemption will be offered to local companies if they register before December 31, 2020 to be listed in the stock market.

Making proposals in the tax collection, he proposed a relief system to pay National Building tax (NBT). The premier also said that a special goods and services tax will be introduced. A special tax appeals court is to be established. He said that the government would also take stern action against companies that forward bogus tax statements.

Rajapaksa said the taxes that will be proposed would stay unchanged at least for five years. Government will seek the allocation of Rs. 2,678 billion for the service expenditure and according to the Bill, limit on borrowings for the financial year 2021 has been set at Rs. 2,900 billion. He said they would look for ‘policy-based borrowings’ from foreign for development clusters.

The vote on the second reading will take place on November 21 while the debate of the Committee Stage will commence on November 23 and is scheduled to conclude on December 10 followed by the vote at 5 pm.