Duty, EV allowances to Sri Lanka’s migrant workers who remit via official channels

ECONOMYNEXT – Sri Lanka’s cabinet of ministers has approved a proposal to provide an additional duty concession and electric vehicle import allowance to migrant workers based on the amount they remit to the country through official channels, Minister of Labour and Foreign Employment Manusha Nanayakkara said.

The proposal was presented in accordance with recommendations by a committee that was appointed to find ways to encourage migrant worker remittances into the country.

Minister Nanayakkara said that, until now, the duty concession allowed at the duty free lounge at Sri Lanka’s international airports was not applicable to the remittances sent by the migrant workers.

“Those concessions will remain the same as we introduce an additional concession for the migrant workers who send money through legal channels,” Nanayakkara said at the weekly cabinet briefing on Tuesday August 02.

“According to the earlier system, the duty concession allowance was as follows; if you were returning in under 90 days, then it was 187.50 US dollars. If it was 90 to 365 days then 625 dollars, and if it was more than 365 days you would get 1,650 dollars as the allowance.”

Nanayakkara said it  was for anyone who went abroad and it was not categorised as remittance senders.

Keeping these allowances as it is, Nanayakkara said, migrant workers who send at least 2,400 dollars will be added to a category called Silver.

“If they are coming back in under 90 days, their allowance will be increased to 787 dollars. If it is between 90 and 365 days, the allowance will be increased to 1,225 dollars and if it is after more than 365 days, the allowance will be increased to 2,350 dollars,” he said.

Accordingly, if the amount of remittances sent was 4,800 dollars, allowances will be increased, for fewer than 90 days to 1,175 dollars, between 90 and 365 days to 1,585 dollars and for more than 365 days up to 2,710 dollars.

If the migrant worker has sent more than 7,200 dollars it will be increased to 1,627 dollars, 2,065 dollars and 3,190 dollars according to the number of days.

“Another category called Gold Plus is for migrant workers who send more than 12,000 dollars within a year. They will get allowances of up to 2,587 dollars, 3,025 dollars and 4,150 dollars as allowances at the duty free.

“If they have sent more than 24,000 dollars within a year, allowances will be as 4,985 dollars, 5,425 dollars and 6,550 dollars according to the number of days.”

Nanayakkara said migrant workers will be grouped into categories through the banking system.

Apart from the duty concessions allowance, the cabinet has also approved a decision to allow migrant workers to import vehicles up to a maximum value of 65,000 US dollars.

Sri Lanka banned importing vehicles in 2020 with the COVID-19 pandemic in order to control foreign exchange outflow of the country.

“We have introduced a special package for migrant workers,” said Nanayakkara.

Migrant workers who send more than 3,000 dollars and less than 20,000 dollars, permission will be given to import electric two-wheelers for half the value that will be sent as remittances.

Nanayakkara said threewheelers will not be permitted to import considering the number of threewheelers already in the country.

Those who send more than 20,000 USD within a year may purchase an electric car for the the value of the remitted amount up to a maximum of 65,000 dollars.

“It should be within 300-500 cc,” said Nanayakkara.

However, electric vehicles thus purchased cannot be charged using the national grid, said Nanayakkara.

“They will have to purchase solar panels for this.

“They should be charged through an off-grid system. We are trying to achieve a few things through this. One is to control forex outflow, environmental protection, and conserving electricity,” he said.

This, too, was given the cabinet approval and it will be implemented in the coming days, he added.

Cabinet spokesman Minister Bandula Gunawardena said circulars with details of the allowances and vehicle packages will be issued within the next week. (Colombo/Aug 02/2022)