Annual Report 2008 - Ministry of Finance and Planning

2. Fiscal Developments - 2008
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• Import of aircraft engines and air craft spare parts.
• The import or supply of solar panel modules and
accessories for the generation of solar power energy
specified under identified HS Code Nos. (with effect
from 01.01.2009).
• The importation of machinery used for the construction
industry, was extended until 31.12.2010.
• The supply of locally manufactured tea machinery
identified by the of Sri Lanka Tea Board, with effect from
01.10.2008.
• The supply of locally manufactured surgical gauze used
for surgeries, with effect from 01.01.2009.
• The importation of buses on or after 09.07.2008 to
replace the buses destroyed due to terrorist activities.
Slower Growth in Excise Tax Revenue
Excise taxes generated from cigarettes, liquor, motor
vehicles, petroleum and selective consumer durables were
Rs. 100,971 million in 2008 indicating an increase of 4.4
percent over 2007.
Indicator
Table 2.6
Excise Tax Performance
Rs. mn. Growth (%)
2006 2007 2008 2007 2008
Liquor 20,662 23,723 27,434 14.8 15.6
Cigarettes 30,099 31,447 37,288 4.5 18.6
Motor Vehicles 20,731 17,415 11,067 (16.0) (36.5)
Petroleum & 21,353 24,099 25,182 12.8 4.5
other
Total 92,845 96,684 100,971 4.1 4.4
GDP ratio (%) 3.2 2.7 2.3
Source : Department of Fiscal Policy
• The importation of brass sheets, brass ingots, thread,
dyes, paraffin wax and shellac for the manufacture
of brassware by the National Craft Council with
the approval of Ministry of Rural Industries and Self
Employment Promotion with effect from 01.01.2009.
• The importation of chemical naphtha by the Ceylon
Petroleum Corporation to be supplied to Ceylon
Electricity Board for the generation of electricity with
effect from 01.01.2009.
In line with ‘Mathata Thitha’: the Government policy to
discourage tobacco and alcohol consumption that enforced
legislation such as National Alcohol and Tobacco Act and
implementation of relevant awareness programmes, the
declining trend in cigarette sales and hard liquor production
that was witnessed in 2007, continued in 2008.
Chart 2.5
• Construction work of “Gama Neguma”, “Maga Neguma”,
“Samurdhi”, and community irrigation projects, carried
out through the participation of the community with
effect from 01.01.2009.
• Supply of financial services by Lady Lohore Loan Fund
with effect from 01.01.2009.
Concessions
• Import of certain equipment with the approval of State
Film Corporation for the production of films was reduced
from 15 to 5 percent.
• VAT on petrol was reduced from 15 to 5 percent.
Overall cigarette sales decreased by 4.3 percent in 2008
compared to that of 2007. However, upward rate revisions on
cigarettes resulted in enhancing the revenue collected from
excise duties by 19 percent in 2008, mitigating the effects of
downward trend in sales
Ministry of Finance and Planning Sri Lanka
Annual Report 2008