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The government said it wanted to implement a a co-ordinated program with organizations in the industry and skills development institutions to produce craftsmen to fill the human resources shortage in the industry.
Cement imported for government projects would be exempted from duty.
Please click to read the Budget 2007 speech:
"The government has faith in the local construction industry, as a result we have given them the opportunity to Design Build and Transfer (DBT) flyover in Colombo and also develop small townships of 10,000 houses," President Rajapakse told Parliament"To ease their financial burden the government proposes to increase the depreciation allowance from 12.5 percent to 25 percent."
An existing withholding tax on construction fees would be reduced from 5 percent to 1 percent.
The industry would no longer have to get import licenses to bring in used construction equipment, the President said.
Profits earned from construction contracts in foreign countries are already exempt from income tax.
The government was also planning to collect a cess to set up a Guarantee Fund for the industry, with the withholding tax.