Sri Lanka’s Trade Liberalisation: What you see is NOT what you get

Abstract

Sri Lanka’s 2014 Budget claims a continuous commitment by the government to maintain a liberal, consistent and simple trade regime. The budget speech puts it this way: “A four band tariff structure presently in place is further consolidated aligned with simplicity to facilitate production and trade”. In support of this claim, the budget provides the simplified import duty structure. But this is a case of misleading with facts. It is true that the import duties are being simplified; but the claim is nevertheless false. This insight shows that import duties are only one of the many taxes imposed, and overall import taxes are increasing, becoming more complex and less predictable and are harming trade.