Sri Lanka's first full post-war budget ( Reuters )

Sri Lankan President Mahinda Rajapaksa on Monday presented the island nation's first full post-war budget with an aim to reduce its fiscal deficit to a 19-year low of 6.8 percent.

Following are some key changes proposed in it:

GOVERNMENT FINANCE
* Government targets 2011 fiscal deficit of 6.8 percent, down from 8 percent in 2010. That would be the lowest since 1992.
* Spending in 2011 is forecast at 1.42 trillion Sri Lankan rupees ($12.72 billion), up 11.4 percent from this year.
* Revenue is estimated to rise 18.6 percent year-on-year to 963.5 billion rupees.TAX REFORMS
* Income tax on industries with value addition in excess of 65 percent will be reduced to 10 percent from 15 percent.
* Income tax on all export companies will be trimmed to 12 percent from 15 percent.
* Tax on financial services to be reduced to 12 percent from 20 percent. Tax on profits of banking and financial institutions will be cut to 28 percent from 35 percent.
* Tax on tourism earnings to be reduced to 12 percent from 15 percent. A $20 per bed tax on all five-star hotels which charge a room rate of less than $125 per night.INVESTING TAX CHANGES
* Foreign investment in unit trusts to be exempted from foreign exchange control restrictions
* Unit trust income from investments in listed debentures and equities to be tax-exempt.
* Expenditure on listing a company in the Colombo Stock Exchange .CSE can be considered as tax-deductible for up to 1 percent of the value of the initial public offering.