Companies ignorant on tax exemptions - Consultant

Ramani KANGARAARACHCHI

The Government should give some form of guarantee to companies if they are to make use of tax exemptions given by the Inland Revenue Act Tax Consultant P. Guruge said.

“Very few companies in Sri Lanka make use of tax exemptions given to them under the Inland Revenue Act due to various reasons, Guruge said at a workshop organised by DPR Consultants held on tax exemptions available to companies at the Trans Asia Hotel Colombo yesterday.

He said investors do not get attracted merely for tax exemptions unless the other facilities such as sufficient infrastructure and required labour force are not available.

“It is not possible to take everything from Colombo,” he said. Reluctance of the financiers to provide loan facilities due to slow progress of enterprises is another reason and some companies do not like to get loans at high interest rates.

He pointed out that political instability and civil unrest in certain areas have become barriers to confidently invest on enterprises. “The Government should come forward here. Fiscal incentives alone are not sufficient”, he said.

Guruge said some companies have not realised the benefits of some tax exemptions as there is no proper platform to have regular discussions and education about them.

“At least they should publish these important facts in the papers and have discussions on specific areas. It should not be confined to theory but should be practical and combined with other macro economic environment. Most of the countries have developed such lagging areas by giving additional support,” Guruge said.

Managing Director, DPR Consultants Bharatha Subasinghe said that identifying the current need his company organised a three day workshop for the first time on VAT, Withholding Tax and Company Tax where more than 50 representatives from various companies are participating.