Sri Lanka hopes hike import taxes to finance ‘stimulus’

Jan 01, 2008 (LBO) – Sri Lanka is hoping to hike import taxes as international prices fall to cover part of the cost of a 16 billion rupee 'stimulus' announced by the government to boost economic growth in 2009, a top official said. The government announced a series of measures this week, including cheaper diesel and furnace oil, cheaper electricity for leisure, leather and apparel industry, cheaper fertilizer for small tea farmers and a 5 percent incentive payment for some exporters who maintain last year's revenues.

International trade minister Sarath Amunugama said the package of goodies was aimed at maintaining growth at 6.0 percent a year.

Trimming

The Minister also announced spending cuts on Sri Lanka's coddled lawmakers and ministers by 5 and 10 percent. Sri Lanka has more than a 100 ministers. The prime minister and the president would face 15 percent cuts.

Government institutions would be put on a 5 percent budget cut.

Treasury secretary Sumith Abeysinghe said the cuts in recurrent expenditure would save about three billion rupees. Capital expenditure reductions were not specified.

The balance money needed for the 'stimulus package' would come from progressively raising import duties a