Prior to Covid 19, the foreign remittances of Sri Lankan migrant workers were around US$ 700 million a month. At the time the dollar rate was a measly Rs. 200 while inflation levels remained stable. However, the situation drastically changed following the pandemic. The remittances dropped to US$ 200 million dealing a death blow to the country’s economy. The workers began using unofficial methods to send remittances while others were forced to return to Sri Lanka after the loss of employment during the time resulting in the sudden drop. This in turn resulted in Sri Lanka facing difficulties in importing crude oil and coal forcing the Government and the Minister of Foreign Affairs and Labour Manusha Nanayakkara to implement measures to attract more remittances. The efforts have now proved fruitful.
The Minister took steps to provide various benefits to migrant workers using official means to send in remittances. A Hope Gate was opened at the Airport allowing migrant workers to use this special terminal during entry and exit. They were also allowed to import an electric vehicle, for half the value of the total remittances sent by them.
The value of purchase and shipping was considered as the total value of the vehicle. This included various categories of vehicles including electric motorcycles, cars, vans and jeeps. It is mandatory for the vehicle to be electric. Currently, 125 applications have been received in relation to US$ 8 million sent into the country and some cars have already been imported and registered. Meanwhile, the Minister announced last week that tax concessions for migrant workers arriving in the country will be increased from May 1.
The remittances sent in from last May will be considered for the concession and will be granted under five categories. All migrant workers who have sent a minimum of US$ 2,400 will qualify for these concessions. The categories have been named Silver, Silver Plus, Gold, Gold Plus and Platinum.
Accordingly, those who have sent in US$ 2,400 – 4,799 will be under to the Silver category and receive an additional US$ 600 tax concession to purchase goods at the BIA Duty Free shops. Remitters of US$ 4,800 – 7,999 will be categorised in the Silver Plus group and will get an additional concession of US$ 960. Gold (US$ 7,200 – 11,999), Gold Plus (US$ 12,000 – 23,999) and Platinum (any amount over US$ 24,000) will get tax concessions of US$ 1,440, 2,400 and 4,800. This will be in addition to the concessions accorded to them. A Sri Lankan who has dual citizenship can also claim this benefit by remitting to a Rupee account.
Meanwhile, a Cabinet proposal has also been submitted to introduce a low-interest rate loan program for migrant workers allowing them to take loans amounting to Rs. 2 million. The President has also proposed that facilities and processes be introduced to support migrant workers to start their own businesses in the country. More concessions will be granted to expatriates who return to the country for good after many years of work abroad.
While 93,669 persons have left the country for work from January 1 to April 27 this year, the Minister intends to increase this number to 300,000 by the end of this year. Last year 312,000 persons had left the country for employment abroad. However, the Government has also turned its attention to retaining professional talent in Sri Lanka without allowing brain drain to occur.
Last year in January Sri Lanka received US$ 259.2 million in remittances while this year it was up to US$ 437.5 million, an increase of 68.8 per cent. Similarly, remittances have increased over the months due to the benefits and concessions offered. The Minister intends to increase this to US$ 1 billion a month bringing in Rs. 12 billion per year. He believes that through the methods imposed the remittances will increase far beyond the current expectations.
According to Nanayakkara, migrant workers will also be prioritised in enrolling their children into schools in Sri Lanka. He noted that “Rata Wiruwos” are heroes who are making a major contribution to rebuild the country and the Government will therefore extend more benefits and concessions to them in the future.