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| Tuesday, 02 November 2004 |
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Call for concessions for SMEs Small and Medium Sector industries find it difficult to survive with the prevailing costs of their primary needs such as power/energy, machinery, materials and labour. The primary needs of an industry rises with every budget resulting in the increase of costs of the product. As our budget is mostly tax based this occurs. Further VAT is also added at the end which will make the selling price higher. Our small industrialists pay many indirect taxes from the beginning of the process. While our small industrialists struggle for existence similar products are imported by traders from other countries under Free Trade Agreements, under-invoiced rackets and as substandard goods dumped to the markets at very low prices. This makes our local manufacturer's situation worse. All the budgets presented in Parliament in the past were 'taxed based'. Without the national growth tax only is not sufficient. When industrialists think of cost reduction why doesn't the government think so? Taxation at various levels from the inception of the industry should not be done. Without development the industry or without allowing the industry to move forward in its normal way taxation is not possible. Such taxation will kill the industry. In most of the South East Asian countries developed in recent times their governments had given incentives, subsidised or had given reduced rate services in order to develop the industries because these industries directly contribute to the national growth and indirectly serve the society by looking after their workers and the families. In most of these countries electricity is given free to the industries. Other energy sources such as fuel and coal are given at a subsidised rate. Raw materials are imported at a very low import duty, and also machinery or components are imported duty free. In our country all these materials are imported at a very high duty rate and a further surcharge is also added. In some countries industrialists are allowed to import machinery required for their industry duty free or duty is charged but a rebate is granted at the production stage. i.e. It is set against the income tax. This could be implemented in our country as a step of helping the industrialists. It seems that phrases such as 'Struggle for existence' and 'Survival of the fittest' described in Charles Darwin's Theory of Evolution are applicable when speaking about today's industries. At least in the budget to come, industrialists expect some concessions like low import duty without surcharges, duty free machinery imports and a policy of reservation of industries. - A. N. Chandradithya |
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