Business Chamber welcomes Budget proposals

ACCOLADE: The Business Chamber of Commerce congratulated President Mahinda Rajapaksa, on presenting a development-oriented and people-friendly budget for the second time in his tenure. 'We are particulary gratified that two of our proposals have been adopted', the Chamber said in a press release.

'The far-reaching adverse impact of the high cost of energy, extending to all aspects of social and economic life of the country was one of the points we had brought to the notice of the Ministry of Finance.

'The apparel industry, in many ways, is the mainstay of the country's social, economic and industrial fabric. If the low cost production capability helped the initial launching of the industry and the subsequent take-off it was fast exhausting its vigour on account of the rapidly escalating cost of energy. This amounted to not less self-immolation in a quota-free environment after 2004.

'The loss of the competitive-edge would have marginalised or apparels in the international markets resulting in detrimental consequences to foreign exchange carnings, livehoods of thousands of young persons and economic growth.

'Therefore, it is axiomatic that the exemption of heavy fuel oil, furnace oil and electricity from the VAT will give a new lease of life to these spheres of the economy. We also do not hesitate to commend the reduction of the ESC to 0.1% in respect of textiles and apparels and the facilitation of the sale of apparels in the local market, on payment Rs. 25 per piece.

'We believe that these steps by the President will restore some vibrancy to the garments sector and bolster the chances of it survival in the medium term.

The Business Chamber of Commerce also welcomes the encouragement to distribute a higher percentage of the company income as dividends to shareholders rather than retaining a disproportionate portion of the profits within the company itself. This measure will provide an incentive to save and invest and will contribute positive to the growth of prosperity in the country.

'We hope and wish that the President and the Government will pursue the peace objective energetically and bring about durable peace and harmony in the country, without which no country can aspire to achieve long-term development goals,' a press release said.