CoPF approves cement CESS tax reduction, welfare allowance, other key orders

The Committee on Public Finance (CoPF) recently approved reducing the CESS tax on cement, following an order presented by Finance Ministry officials.

This decision is expected to reduce the price of cement by Rs. 1 per kilo, leading to a reduction of around Rs. 100 per bag of cement.

The move was made at a meeting held on 8 January, Chaired by MP Dr. Harsha de Silva at Parliament premises. During the session, several gazettes and financial measures were reviewed and approved to address taxation, export development, and welfare benefits.

Accordingly, the Order under Section 14 of the Sri Lanka Export Development Act, No. 40 of 1979 published in the Gazette Extraordinary No. 2400/25, Notification under Section 3(4) of the Strategic Development Projects Act, No. 14 of 2008 published in the Gazette Extraordinary No. 2399/16, Order under Section 3(4) of the Strategic Development Projects Act, No. 14 of 2008 published in the Gazette Extraordinary No. 2401/19, six Gazette Notifications published under six Orders under the Special Commodity Levy Act, No. 48 of 2007, and the Notification under the Welfare Benefits Act, No. 24 of 2002 published in the Gazette Extraordinary No. 2415/66 were taken into consideration by the Committee.

Considering the Order under Section 14 of the Sri Lanka Export Development Act, No. 40 of 1979 published in the Gazette Extraordinary No. 2400/25, Dr. de Silva instructed Finance Ministry officials to take necessary measures to ensure that revenue generated through the CESS tax imposed for export development is directly transferred to the relevant financial institutions.

Additionally, the Order to reduce the tax imposed on the export of rock boulders, which was introduced during the construction of the Hambantota Port, was also approved by the Committee. Accordingly, a tax of Rs. 1,000 per cubic metre will be levied for the export of 1 million tons of rock boulders.

The CoPF also considered welfare measures under the Welfare Benefits Act, No. 24 of 2002 published in the Gazette Extraordinary No. 2415/66. The Committee approved the benefits to be provided to beneficiaries of the Aswesuma program by the end of this year. During the discussions, approval was given to increase the allowance for households under extreme poverty from Rs. 15,000 to Rs. 17,500, for households currently receiving Rs. 8,500 to Rs. 10,000, and for households receiving Rs. 2,500 to Rs. 5,000. However, the allowance of Rs. 5,000 for some households was decided to be kept unchanged.

In addition, the CoPF reviewed Orders under Section 3(4) of the Strategic Development Projects Act, No. 14 of 2008 published in the Gazette Extraordinary No. 2399/16 pertaining to the Western Terminal of the Colombo Port. The Orders did not receive the approval of the Committee, and it was decided to re-consider the Order under Section 3(4) of the Strategic Development Projects Act, No. 14 of 2008 published in the Gazette Extraordinary No. 2401/19 regarding a garment factory to be built in Batticaloa on a later date.

Moreover, six Orders under the Special Commodity Levy Act, No. 48 of 2007 were taken into consideration. These included extending the validity periods and reducing taxes.

Members of the Committee MPs Ravi Karunanayake, Harshana Rajakaruna, Shanakiyan Rasamanickam, Dr. Kaushalya Ariyarathne, Nimal Palihena, Wijesiri Basnayake, Thilina Samarakoon, and Lakmali Hemachandra were present at the Committee meeting.