The Small and Medium Enterprises (SME) sector, which employs 35% of the labour force representing 25% of the national economy, was a net beneficiary of the Budget 2013.
- Regional Development Banks (RDB) to extend credit facilities based on SME group guarantees
- SMEs with an annual turnover of less than Rs.500mn to be taxed at 10%
- Exempt SMEs from Nation Building Tax (NBT) and Value Added Tax (VAT) with effect from January 2013
- Expand micro-finance and leasing facilities through Samurdhi banking societies up to Rs. 500,000
- Lankaputhra Development Bank to implement a Credit Guarantee Scheme to underwrite credit risks of institutions which lend to small businesses
The following proposals were also made to support industries from which the SME sector can benefit:
- Increase the replanting subsidy from Rs. 300,000 to Rs. 350,000 per hectare from 2013 to encourage replanting among small holders
- Provide Rs. 2 bn for the development of eight fishery harbours
- Organic fertiliser to be procured at a guaranteed price of Rs. 400 per 50kg bag by Ceylon Fertiliser Corporation
- Seed paddy requirement for the Maha cultivation to be provided free of charge to all farmers in weather-affected areas
- High import taxes on milk powder will be maintained to encourage local milk production
- Increase taxes on imported canned fish and lower the taxes on required raw materials to encourage the local fish canning industry
- 5,000 acres of underutilised plantation company land to be reallocated on a 30-year lease to develop small holder plantation crops among 12,500 entrepreneurial youth
