CNCI forwards budget proposals

Ceylon National Chamber of Industries (CNCI) representatives headed by Chairman, A.K. Ratnarajah had a discussion with Dr. P.B. Jayasundera,Secretary to the Treasury recently to discuss the National Budget Proposal 2008 of Chamber.

Among several proposals of CNCI towards the overall well being of the economy of the country chamber also raised issues related to the Industrial Sector and business community in particular. CNCI announce the following matters received due consideration by the Secretary to the Treasury at the said discussion.

Levy of Witholding Tax on payments of Rs. 50,000/- and above Dr. Jayasundera termed it as a ‘nusance tax’ enormously increasing the work load of the business community as well the Department of Inland Revenue and agreed to consider it to be abolished.

Imposition of CESS on finished goods which are being manufactured locally but imported under the Indo Lanka Free Trade Agreement. Secretary to the Treasury spoke in favour of this proposal too and agreed to consider same.

CNCI also impressed upon him the waste of time and resources on the computation payment and documentation relating to multitude of taxes.

Chamber proposed amalgamation of these taxes where possible and elimination of redundancies in order to simplify the payment thereby the burden of taxpayer and to entrap non-tax payers in the net. This proposal met with his favourable consideration.

Chamber also pointed out the adverse effects on cash flow and liquidity of Companies having to pay advance tax and to prove non-liability to obtain refunds afterwards and secretary agreed to explore probable alternatives CNCI proposed to restore the input VAT set-off to 100% as it is near impossible to reclaim excess VAT paid.

Though the Treasury Officials did not agree to lift the 85% limitation they agreed to consider probabilities in having a reduced standard VAT rate.

Considering the fact that raw material imports are made under FTAs, TIEps scheme and under BOI criteria with zero duty which leaves only a minority of manufacturers who are being called upon to pay duty on raw material imports as they do not belong to any of the above mentioned categories.

CNCI also made a request to explore the possibilities of intermediate goods imported as raw material also be gradually brought under zero duty. The Secretary to the Treasury was receptive to this proposal too and agreed to look into the probabilities.