Sri Lanka to charge banks, finance sector 2 per cent 'nation-building tax'

COLOMBO (REUTERS) - Sri Lanka plans to begin assessing a 2 per cent "nation-building tax" on banks and financial institutions, President Mahinda Rajapaksa told the parliament on Thursday while presenting the country's 2014 budget.

Rajapaksa, who is also the finance minister said, gave no details about when the financial sector will start paying the tax.

The nation-building tax is already assessed on some business sectors in Sri Lanka. Companies pay it based on their revenue.

Extending the tax to the financial sector appears aimed at cutting the country's budget deficit.

Rajapaksa said the deficit can be reduced to 5.2 per cent of gross domestic product in 2014 from 5.8 per cent this year.