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Sri Lanka slashes duty on cars, luxury goods

[AFP, Wednesday, 2 June 2010 08:23 No Comment]

v0uKj3z00A Sri Lanka on Wednesday slashed duties on imports, cars and consumer goods with immediate effect in a bid to boost post-war economic activity.

A 15-percent surcharge on all shipments into the country was lifted while vehicle duties, running at 350 percent, were halved, the finance ministry said in a statement.

It said tourism had picked up following the defeat of Tamil Tiger rebels last year after a decades-long conflict and that the economy needed fresh impetus to grow.

As well as the soaring vehicle duty the government had also made it difficult to bring cars into the country by ordering banks not to finance such imports as it grappled with a severe foreign exchange shortage two years ago.

However, Colombo has since negotiated a 2.6 billion dollar bail-out plan with the International Monetary Fund (IMF) and the country’s foreign reserves have shot to a record 5.3 billion dollars.

The IMF loan was approved last July, two months after the military crushed the Tamil Tiger rebels and ended a conflict that is estimated to have claimed 100,000 lives.

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