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By Channa Kasturisinghe

The Federation of Chambers of Commerce and Industries in Sri Lanka (FCCISL) yesterday lauded the Budget 2003 and described it as a development-oriented budget.

The Finance Minister K.N. Choksy has done his job in a very professional manner in presenting a country oriented budget which is not just focusing on satisfying the public through short-term measures, the FCCISL President Macky Hashim said.

He said the Finance Minister has objectively looked at ways and means of lowering the cost of the existing national debt which, rose from Rs.550 billion in 1994 to Rs.1450 billion in 2001.

"The servicing of the public debt which had been a burden on every citizen has been handled successfully in this budget. The other salient feature of the budget 2003 is the effective measures taken towards employment generation. However, it is important that the Government implements these proposals unlike the previous Governments," Hashim said.

He said that much has to be done in the area of taxation.

The decision to reduce the Corporate tax to 30 percent on companies with a taxable income of over Rs.5 million is a positive measure. However, personal taxes should have been brought down further," Hashim said.

The immediate Past President of the FCCISL Lal de Mel said the most important step towards the welfare of the public taken by the Government in this budget was providing affordable housing finance for low and middle income households.

"The decision to limit tax liability of Unit Trust holders to a 10 percent withholding tax on dividend and interest income is another progressive measure. It would enable ordinary people to invest in the stock market without much risk.

Another important area is the measure taken to promote investment, foster promising start-ups and the restructuring of distressed enterprises. Establishing of a Human Resource Endowment Fund and a Road Fund are measures which would augur well for the country in the long run," de Mel said.

However, he pointed out that the decision to impose a remittance tax of 10 percent on non-resident companies would have a negative effect on foreign investments.

"At this juncture the country needs foreign investors to invest heavily in the country. Therefore, measures should be taken to attract as many investors as possible.

Another negative point in this budget are the measures taken to control the prices of commodities.

What the Government should do is to create an environment where the prices are controlled by a free market mechanism. It is also important to eliminate monopoly in the market," de Mel said.

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