ICTAD empowered to collect CIGF Levy
 

by Ramani Kangaraarachchi

The Institute of Construction Industry (ICTAD) is empowered to collect the CIGF Levy on behalf of the government which was approved by Parliament under the Finance Act No 5 of 2005.

This was revealed by ICTAD Chairman Prof. Lakshman Alwis at a press conference held on Monday. Alwis said that this is a landmark in the construction industry where the contractor contributes to the development of the industry. He said that the forecasted value of contracts signed by 2005 would be Rs 2.71 billion. The construction industry in Sri Lanka is very poor compared to other developed countries and having identified the need to strengthen the industry.

The government proposed to charge a Construction Industry Guarantee Fund (CIGF) levy as a construction industry revival initiative in the 2004 Budget speech., he said.

It is proposed to increase the capital of the CIGF Levy to Rs 500 million as local construction firms find it difficult to submit bonds and raise funds due to lack of proper securities .A cess of 0.25 percent from small contractors and 0.5 percent from medium contractors and one percent from large contractors on their contract turnover would be imposed and earmarked for the fund. The Government would also contribute Rs.250 million.

The Act provides to collect the Levy on every construction contract enforced in Sri Lanka by every construction contractor on contracts entered into on or after January 1, 2005. The construction contracts valued at less than Rs 15 million are not subjected to the Levy while the contracts valued at Rs 150 million or above will be subjected to 1 percent levy.