Sri Lanka Cuts Taxes, Eases Currency Rules for Growth

Sri Lanka said it will cut taxes on banks and builders, adopt an inflation target and ease foreign- exchange rules to accelerate growth and curb prices in the South Asian nation emerging from a 26-year civil war.

President Mahinda Rajapaksa, unveiling the 2011 budget in Colombo yesterday, announced plans to lower the value added tax for lenders to 12 percent from 20 percent, reduce the levy on construction companies to 12 percent and offer breaks to tea and rubber companies. He forecast the budget deficit to narrow to 6.8 percent of gross domestic product from 8 percent in 2010.