By: Staff Writer
Colombo (LNW): Sri Lanka is set to increase duty-free allowances for migrant workers at the airport starting May in order to encourage remittance, Minister of Labor and Foreign Employment Manusha Nanayakkara said.
The increase will be based on the amount of money remitted by the workers, Nanayakkara said during a media briefing.Under the new scheme, there will be five categories of concessions.
For people having remitted 2,400-4,799, 4,800-7,199, 7,200-11,999, 12,000-23,999 and 24,000 U.S. dollars or more, they will be eligible for an additional duty-free allowance of 600, 960, 1,440, 2,400, and 4,800 U.S. dollars, respectively, when shopping at the airport, according to the minister.
The concessions will be available to anyone who has sent the mentioned amount of money through official channels to the country within a year, the minister said.
He added that no tax will be charged on foreign worker remittances and money held in banks in the form of foreign exchange.
Migrant workers’ remittance is one of the main sources of foreign exchange for the South Asian country.
Sri Lankan migrant workers’ foreign remittances amounted to a total of US$ 844.9 million in the first two months of 2023, the Central Bank of Sri Lanka (CBSL) says.
According to a latest report published by the central bank, this is an increase of 82% in comparison to the total sum of $464.1 million foreign remittances recorded in both January and February last year.
The central bank’s figures have shown that the foreign remittances earned by Sri Lankan migrant workers’ were at $437.5 million and $ 407.4 million in January and February 2023, respectively.
Meanwhile, foreign remittances received in December 2022 alone amounted to $475.6 million, recording the highest figure reported in a single month since June 2021.
Worker remittances during the six years from 2015 to 2020 had averaged more than $ 7 billion each year, substantially improving the foreign exchange liquidity in the country and in the banking system.
But in 2021 worker remittances dropped to $ 5.5 billion and in 2022 dropped further sharply to $ 3.8 billion. The country lost thereby $ 1.6 billion in 2021 compared to $ 7.1 billion earned in 2020 in 2022 it has e lost $ 3.3 billion compared to 2020 as well as compared with the previous six year annual average earnings.
However, despite the increase in migration, the Central Bank of Sri Lanka (CBSL) statistics fail to show a similar growth in remittances. During the period from January to October 2022, the remittance inflow has been recorded as $ 2.9 billion compared to $ 4.8 billion in the same period in 2021.
However, total departures for foreign employment during January to October 2022 were recorded at 251,151, which exceeded the annual departures in the pre-pandemic period.
