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No tax on foreign currency

Jun 3, 2010 11:22:00 AM - itnnews.lk

The Government is to remove taxes totaling up to 22 percent on import of foreign currency. The purpose is to curb black market trade.

Addressing the weekly cabinet news briefing, Minister Keheliya Rambukwella said it will also to reduce the premium paid by consumers in the official money exchange system.

All printed material brought into Sri Lanka is taxed, including currencies, but currencies are not taxed on face value. All printed material is subjected to Value Added Tax, Nation Building Levy and Port and Airport Development Levy which adds up to about 22 percent. The Minister said the black market gets hard currency without any taxes. Since buying foreign exchange from banks is more expensive, people tend to go to black market currency dealers to buy foreign currency notes. He added that with these taxes removed, the black market will find it hard to compete with Government approved institutions