Tax system complicating all

HIRAN H. SENEWIRATNE

Sri Lanka should have a simple tax structure to attract Direct Foreign Investment (FDI) to Sri Lanka in a more effective and efficient manner, Managing Director Pyramid Wilmar (Pvt) Ltd Sajjad Mawzoon said.

He said if we have a simple tax system that would benefit local and foreign investors to invest in Sri Lanka because the current complicated system has a lot of problems for everybody.

Mawzoon said currently more than six different tax varieties at all levels are complicating the entire system. Therefore, fiscal policies should be adopted to bring down to all taxes to one or two taxes making it easier for everybody, he said.

Mawzoon also said in most developed countries they have a very simple tax structure where it is clear and precise and really helps everybody. He said knowing the complexity of the tax structure, the Government still introduces new taxes to the system.

Q: What has happened the initial Vanaspathy business?

We started with Vanaspathy business where we manufacture Vanaspathy Gee for Indian companies. We were the main suppliers to the Indian top three brands.

Because of the Indian Government's decision to reduce import duty from 45 per cent to zero per cent to control the inflation we found that it was not viable to export to India. We hope India will reinforce the duty and then we will be able to venture into the Indian market one day perhaps after the global crisis.

Q: There is a crisis in the coconut industry due to the import of edible oil to Sri Lanka. How would you strike a balance between these two segments?

To strike a balance between two segments are to adjust tariff structures based on the world prices or change at least in once in three months. Because coconut growers have a genuine problem and they should have the farmgate price of Rs 20 for a nut for a coconut grower to be profitable.

Q: What is the connection to Unilever Sri Lanka with Pyramid Wilmar?

We commenced operations in 2005 by purchasing the ownership of the brand and manufacturing rights of 'Masterline' Bakery product range from Unilever Sri Lanka.

After its successful launch the company introduced 'Fortune' brand of oil and other consumer goods such as sauces, vinegar, jelly crystals, chilly paste, tinned fish etc. We are also into edible oil business.

Pyramid Wilmar Limited is a joint venture between the Singapore based Wilmar International Limited and Wressle Holdings limited which is a leading company in Asia. We are now going to invest US $ 6.5 million for expansion.

Q: What is the trend in the edible oil and margarine and fat sector in Sri Lanka?

There is a five per cent growth in the edible oil sector and expect a five per cent growth in margarine and fat sector next year. Our company entered into the business under the 'Fortune' brand dominated the second position in the market with a 30 per cent share in the edible market.

Q: How would the interest rate and currency fluctuation impact the local industries?

As we know India has devalued the US $ by 27 per cent to encourage Indian exports. Therefore, the Central Bank of Sri Lanka must devalue the US $ at least 10 per cent and in turn it will give a big boost to the local export business. This will also control the interest rates in the medium to long term perspective.

Q: How would you look at the global financial crisis?

Global recession hit the whole world but fortunately Sri Lanka is lucky it has not affected. But worst time is yet to come.

As a company, we have taken some precautions like limiting our credits without going for big borrowing from banks and other financial institutions. With the current financial crisis it will affect the exports business.

Q: If you were asked to advice the national leaders of the country to resolve burning issues in the country, how would you advise them?

I think Sri Lanka should achieve a rapid economic growth. We could learn a lot of success stories from countries like Singapore and Malaysia where they have privatised all services. But Sri Lanka could not go to that extreme.

My advice is the Government must deviate from running business entities especially sick companies with tax payers' money. These entities should either be privatised or given to entrepreneurs.

The Government plays a catalystic role while focusing on health, education and infrastructure projects. We have to definitely be the gateway to attract Foreign Direct Investment (FDI).

Foreign investors are focusing on long term investment. Therefore, to establish business ventures we have to adopt a one-stop-shop concept. The fiscal policies should be consistent and should not change with the changes of Governments.

Q: What is your philosophy in life?

I took over the business from my father who started business as a copra broker from down south and ended up as a oil miller. I worked hard and team work has enabled me to take the company to great heights.

Q: What is the interest during your leisure time.

I play snooker and billiards during leisure time. I was also the former President of the Billiards and Snooker Federation for some years and I wanted to introduce that game to all schools in the country.

Because I love this game as it disciplines my mind. I also love to travel. Singapore is considered by me as my second home.

Q: What is your retirement plan?

I don't have a retirement plan as such and will work till I could work for the purpose of doing some contribution to the industry. If I feel one day I could not work and cannot do some contribution to the industry I will retire.

Managing Director Pyramid Wilmar (Pvt) Ltd Sajjad Mawzoon

Profile

Name - Sajjad Mawzoon
School attended - Royal College, Colombo
Civil status - Married, has four children
Education -
Professional -
Member of the
Association of Business Executives (ABE)

Current Positions - Managing Director - Pyramid Wilmar (Pvt) Limited, Pyramid Lanka (Pvt) Ltd, Pyramid Oil Mills, The Phone Company Limited, Pyramid Oil and Logistic Company.