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| Tuesday, 21 September 2004 |
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Chambers advocate tax holiday for SME investors by Shirajiv Sirimane The government should consider extending a tax amnesty to the Small and Medium sector investors who have been overlooked for decades. According to Senior Vice President, Federation of Chambers of Commerce and Industry (FCCISL) Navaz Rajabdeen, even the previous government's highly controversial tax amnesty did not cover the SME sector which is the backbone of the local economy. The SME sector is heavily involved in loans obtained from banks and other institutions and they pay large amounts on customs duty. "In addition they also have to pay income tax. Since Sri Lanka's economy was down in the previous years the SME sector profit margins too were low," he said. Rajabdeen said that the tax amnesty which was granted in the previous regime had legislation to write off customs dues and had granted as amnesty on excise duty. "Some claims were in excess of Rs. 400 million," he said. While welcoming the move for a tax amnesty he said that businessmen and institutions which defaulted customs and Excise duty should be brought to book at any cost. He praised the government for identifying the need to develop the agriculture, live stock and the rural economy. "These areas were ignored for over three decades," he said. "What the chambers are suggesting is to extend a tax holiday for the Small and medium sector and also request the state banks to give the SME sector entrepreneurs some concessions with regard to their bank loans," he said. We are not asking the banks to write off their dues but only to stop charging interest against the capital they have obtained. "This segment of people are genuine and they contribute to the economy in a big way," he said. He said that there is a vacuum for a true national development bank to stimulate the agriculture and the rural economy. "Rural entrepreneurs could then obtain loans from this bank and this would be an ideal tool to have a kick start for the UPFA economic policy centering around the masses," he said. |
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