http://www.dailynews.lk/2010/11/23/news05.asp

Budget highlights
Public servants
Special allowance equivalent to five percent of basic salary, effective from January 2011 CoL allowance increased by Rs 600 effective from January 2011 (non staff grades) and July 2011 (staff grades)
Pensions will be increased by Rs 750 per month for those retired before January 1, 2004 and by Rs 250 per month for those who retried between January 1, 2004 and December 31, 2005. This will be effective from July 2011
University academic staff and staff grade researchers in research institutions will get monthly research allowance equivalent to 25 percent of their basic salary from January 2011
Doctors’ on call allowance increased by 25 percent from January 2011
Personal allowance of Members of the Judiciary under JSC increased by 25 percent Professional and managerial level public servants to get concessionary duty to import motor vehicles

Tax system
Current tax rates on personal income to be reduced to a range of four to 24 percent, tax free threshold income increased to Rs 500,000 and tax slab also increased to Rs 500,000. PAYE tax will be deducted only from employees earning over Rs 600,000 per year. Maximum tax rate will be 25 percent.
PAYE will be extended to the public sector. Terminal EPF benefits exempted from tax. New employees pension fund
New overseas employment fund
New citizens’ pension and insurance fund
Nation Building Tax reduced from three to two percent. Applicable threshold fixed at Rs 500,000
Social responsibility levy, rural infrastructure levy and debit tax to be abolished
Liquor, cigarette, casino taxes up by five percent
Levy of US $ 20 per bed on all Five Star hotels which charge a room rate less than US $ 125 per night effective January 2011
VAT on financial services to be reduced from 20 to 12 percent
Tax on profits of banking and financial institutions to be reduced from 25 to 30 percent

Plantations
Smallholder tea growers subsidy increased by Rs 500,000 per ha
Rs 500,000 million subsidy for tree planting and new planting, inter cropping in the coconut sector
Increased tree plantation subsidy for rubber A 50 percent subsidy to popularize rain guards

Import-export and industry
CESS on exports in raw and semi process form.
Finished goods exports free from such CESS.
Duties and Taxes on machinery, equipment and raw material enabling access to world class technology will be reduced.
Tax reduction from 15 to 10 percent for industries with domestic value addition in excess of 65 percent.
Income tax of all export companies will be reduced from 15 to 12 percent.
Income tax on profits to be reduced from 35 to 28 percent.
Tax on tourism and related business income will be reduced from 15 to 12 percent
Duties and taxes on passenger transportation vehicles to be reduced by 25 percent
Import of electric and high bred vehicles exempted from Excise tax and VAT

Agriculture
Seed farming investments get five year tax exemption
Rs 700 million for seed farm development
Farm gate price for liquid milk to be increased to Rs 50 per litre
North and East to produce 50 percent of total fish production