New National Tariff Policy comes in to force in three phases next year
June 14, Colombo (LNW): The Government has decided to implement the new National Tariff Policy in three phases starting January 2025 to establish a stable, predictable tariff framework, boosting competitive edge for trade and investment in Sri Lanka.
The Cabinet of Ministers on Tuesday approved the implementation of the policy, which will be published through a Gazette notification under Section 101 of the Customs Ordinance to ensure awareness and compliance among stakeholders.
Treasury Secretary Mahinda Siriwardana has said that Sri Lanka has high import duties, and so-called para-tariffs such as the port and airport levey, and ‘export development’ CESS which has pushed up cost of imported raw materials, making it impossible for any firm other than those in Board of Investment zones, which can import inputs tax free, to be export competitive.
“The tax structure to support exports and investment is also being facilitated, particularly with the phasing out of para-tariffs such as PAL and Cess which have in the past added to cost of raw materials and intermediate inputs which undermined Sri Lanka’s competitiveness,” Siriwardana was quoted as saying at presentation at the Finance Ministry.
“Para-tariffs also contributed to an overall macroeconomic framework that led to an anti-export bias in the economy since they channelled scarce resources into sectors where Sri Lanka has not been globally competitive.”
“The reforms to the tariff structure to support an export-oriented economy will be encapsulated in the National Tariff Policy which is being developed he saidadding that so-called para tariffs are to be phased out in stages.
Sri Lanka’s investment climate has been negatively impacted by frequent tariff policy revisions aligned with the changing policies of successive Governments. A clear, simple, coherent and predictable tariff system is crucial for maintaining a competitive trade and investment environment.
“This policy aims to establish a more stable and predictable tariff framework, enhancing the competitive environment for trade and investment in Sri Lanka,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the weekly post-Cabinet meeting media briefing yesterday.
In response to this issue, he said a technical committee led by the Director General of the Department of Trade and Investment Policy of the Treasury, along with members from relevant agencies, was appointed on the advice of the Minister of Finance, Economic Stabilisation and National Policy.
“This committee, in consultation with the business and industry community and under the guidance of trade experts and Ministry Secretaries has formulated the new national tariff policy,” he added.
