"The government has imposed a 5 per cent customs duty and another 5 per cent surcharge on gold imports," a top Sri Lankan government official who is involved with the decision making told Reuters on condition of anonymity.

"There is an increase in gold imports and we have seen some people using the situation as an arbitrage with India having a tax. We also have found some leakages and we want to prevent this," he said.

Recently, Sri Lankan customs nabbed a series of people suspected of smuggling gold out of the country at airports.

The National Gem and Jewellery authority said the increase in the import tax on gold by 10 per cent would have an immediate impact on local gold prices.

A spokesman said prior to the tax increase one sovereign of 24-carats was sold at Rs47,000 but that it would now cost between Rs4,000 and Rs5,000 more.

He said the fallout from the tax increase was not noticed on Saturday but the prices were bound to increase by next week.

When asked what prompted the 10 per cent tax on gold, the spokesman said the authority was not aware why such a decision was taken by the Treasury.

“These matters are handled by the Treasury and we have not yet received any official notification about the reasons for the increase” he said.

£3,000 bond for Sri Lankans to enter Britain

Foreigners from “high risk” countries including Sri Lanka will have to pay a £3,000 cash bond to enter Britain under a tough new crackdown on illegal immigration, according to a report in ‘The Sun’.
 
A pilot scheme to be rolled out by British Home Secretary Theresa May in November will charge visitors from six African and Asian countries to come into the country.
 
The Australian-style tactic mean foreigners would lose the £3,000 cash bond if they overstay their visas.
 
The first scheme will cover India, Pakistan, Bangladesh, Sri Lanka, Nigeria and Ghana.
 
Visitors from those countries will have to pay the bond as security against living in Britain illegally.
 
Home Secretary May said: “This is the next step in making sure our immigration system is more selective, bringing down net migration from the hundreds of thousands to the tens of thousands, while still welcoming the brightest and the best to Britain.”
 
She added: “In the long run we’re interested in a system of bonds that deters overstaying and recovers costs if a foreign national has used our public services.”
 
The Home Office is targeting countries which have high volumes of visitor visa applications and what it deems to be relatively high levels of fraud and abuse.