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The Ceylon National Chamber of Industries (CNCI) has proposed to the Government to place emphasis on national policies in order to further develop industries in its budget proposals for 2003.

The CNCI said that the interests of industries should be taken into consideration and create a conducive environment to increase productivity in the industrial sector. The CNCI submitted its proposals to the Treasury last week.

Some of the proposals highlighted include tariff reduction in electricity, infrastructure development, same concessions for BOI and non BOI companies and allowing only local companies to be involved in trading activities.

"We are also concerned about the delay in the establishment of the Coal Power Plant.

We feel it is time for more than one Coal Power Plant to be set up. Three sites have been already selected. These developments to be identified as national issues by all parties should be taken out of all political agendas," a chamber spokesman said.

Among the budget proposals submitted by the CNCI are:

a) Reduction of budget deficit.

b) Improvement of Productivity in all sectors, be it manufacturing, services and agriculture of Private Sector and Government.

c) Promotion of Exports.

d) Improvement of infrastructure.

Some of the areas that must be looked at are:

i) The pruning down of all expenditure in the State Sectors, cutting out wastage.

ii) Rationalising government departments and corporations and closing down those that are unnecessary. We suggest a management review of the need and sizes and scope of Government Departments and Corporations. The earlier system of Treasury control on expansion and creation of new position should be brought in.

"We advocate targeting of welfare activities and elimination of waste and corruption. Government officers must be held accountable for their acts of omission and commission. Appoint Chamber representatives to Government Boards.

. Policy directives for all State activities must be given to last for the next 4/5 years. Irregular changes in policy frustrates investment.

Holidays should be curtailed. Payment to the entire work force must be based on performance.

Infrastructure is in a depleted state. Priority must be given to the improvement of roads, major highways and the railways.

These must be developed to ease congestion. Target dates should be fixed for building and completing new highways.

This can be done even with limited resources. We advocate that the Railway gears itself on a priority basis to transport containers thereby easing congestion on the roads and increasing the revenue of the railway.

On policies of the WTO all SAARC countries should get together to ensure that our concerns are met.

The 20% surcharge on duties levied at present must continue in order to safeguard local industries.

Industries must be encouraged to relocate to industrial zones by the granting tax incentives such as 100% capital allowance of relocation expenses. Industries based in rural and less developed areas be given tax and other incentives or special infrastructure subsidies to offset their additional operational costs. Provision of power supply at reduced cost is an example.

The present mechanism for the operation of Parate Execution is not satisfactory as it is weighted in favour of one party. Restructuring of enterprises must be examined by banks as is done in countries such as India and the USA. Provision for an appeal to an independent body is a necessity.

The local textile industry is in a state of collapse due to imported textiles being duty free. A measure of duty must be reintroduced to help the revival of the textile industry.

Entry and Exit of production facilities and nature of businesses are now of shorter duration due to fast changing global trading. Thus enterprises must be able to avail of the capital allowance within one or two years.

Exports should be encouraged with all possible incentives. Incremental increases in exports must be encouraged by allowing incremental profits to be tax free.

Efforts must be made to develop exports in areas where we have a competitive edge over other countries. Private sector and government must identify required policy changes to develop exports.

The present sectoral reports prepared by the Ministry of Enterprise Development and the private sector should be considered as the basic policy paper. With every budget, steps to be taken for implementation based on these sectoral studies.Though some steps have been taken to rationalise the expenditure of State organisations we feel that this should be expedited by having management studies to review the very need, the size and scope of all Government organisations. Unnecessary Departments should be closed down. This we feel will not only expedite the working of the Government but will also reduce expenditure. All unnecessary refurbishment of Ministries and offices to be curtailed.

All State organisations must be called upon to prepare their Corporate Plans, and make them Public. Heads to be held responsible for their achievement.

Welfare facilities be targeted to the needy.

An all party Parliamentary committee to be appointed to review the national Holiday structure.

Legislation be brought in to have all Elections on weekends so that normal work is not disrupted.

In order to increase productivity multiplicity of taxes should be avoided. These not only increase work but the cost of collection and monitoring itself takes away part of the collection. Port Levy charge, charge for the computerisation of Customs, EPF and ETF are some such instances. Take immediate steps to amalgamate EPF and ETF.Complete computerisation of the work of the Customs is long overdue. If it is delayed due to non-availability of funds a certain percentage of income generated by the Sri Lanka Customs to be allocated for this purpose.

Improving of the Highways and the Railways has to be undertaken on a priority basis. We repeat that the Railways should be developed to transport containers. Once again this item to be listed in our national agenda. Implementation of national agenda items must become the responsibility of all political parties.

In order to improve competitiveness of Companies we suggest that 100% capital allowance is granted on investment on computers and accessories, plant and machinery for modernisation of R & D, and testing equipment. This be extended to industries relocating in industrial zones or in less developed areas. These may be limited to a percentage of the profits, so as to give the Government Revenue too. We are conscious that these may have adverse effects on the revenue of Government in the short-term but will certainly bring returns in the long-term.

We also advocate that duty on testing equipment be made duty free. This will enable an increase in the quality standards of our products.

Concessions granted to BOI Companies accessing the local markets should be made available to non BOI Companies too so that level a playing field is established. Abuses by the BOI Companies accessing the local market have to be arrested.

Greater transparency and accountability of Government Officials from misuse of authority is required. We also suggest re-orientation of Government Officials to understand and support business and commerce.

Debit Tax on bank account should go. It discourages banking and could be regarded as another form of NSL.

Practice of having various forms of taxes and levies should be dispensed with.

Country should promote productivity at every level. Each new tax or levy involves additional paper work, manpower, data entry and processing, allocation of staff to check compliance etc.

For example the Port Development Fee of 3/4 of a percent introduced with the last budget. Basically this is a revenue measure targeted for a specific purpose. Without introducing this new tax this could have been realised by increasing the surcharge or still better the duty by this amount. When a customs entry is to be filed duty, surcharge, Port Levy and VAT have to be computed separately, checked at customs, perhaps accounted separately. What is the need for these four items?

NSL credit at the time of introduction of VAT cannot be set off against the VAT. It has to be claimed from Department of Inland Revenue. This has strained the cash flow of the companies which are already undergoing difficulties. A claim as every one knows is not going to be paid easily and is going to cost the Companies to reclaim and the State to operate the refund. Even at this late stage request for a set off.When a company has made an excess NSL payment, and has a credit balance with the Department of Inland Revenue, this to be set off against Income Tax payment.

Give duty concessions on import of Capital Goods especially using advanced technology as was available up to December 2001.

Exempt Capital Goods from the duty surcharge.

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