President to present relief and development oriented Budget:

Chambers seek simple tax formula From the Business Desk

President Mahinda Rajapaksa who is also the Finance Minister will present a relief and development oriented budget today. The Daily News Business spoke to several Chamber leaders representing different industries to find out what they expect from the budget.

The National Chamber of Commerce President Lal de Alwis said they have proposed to take into consideration the significance of agriculture in the country's economy and to make agriculture undertakings free of income tax for a further period of a minimum of five years.

The Chamber also proposes to remove import duty of hybrid maize seeds, soya bean seeds, sunflower seeds and palm oil seeds used as planting material when such planting materials are not locally available in sufficient quantities.

"We request the Government to provide low interest loans through the Central Bank to manufacture specific packing material locally for fruits and vegetables to minimize losses," he said.

The Chamber proposes to simplify the tax system by reducing the number of taxes and adopting simple calculation methods that could be understood by the average citizen.

National Chamber of Exporters of Sri Lanka President Sarath de Silva said the Government needs to extend the fertilizer subsidy to vegetable, fruits and other crop cultivations.

"We request the authorities to remove existing barriers to use these lands for cultivation purposes. We need to remove all barriers that hamper the potential of local investors while giving them due recognition and prioritizing local investments in the future," he said.

"We have also requested from the authorities to remove the high electricity tariffs, which is an impediment for the local exporters when they compete with international players engaged in manufacturing rubber, tyre, ceramic and other products," he said.

"Public banks need to take high equity in local agro products, as the country needs to become an agro economic country to get the fullest advantages in the agricultural industry".

Ceylon National Chamber of Industries CNCI Chairman Sunil Liyanage said they expect mainly macro economic and fiscal policies for economic development from this budget.

He expects new policies will be introduced towards this end and make them consistent for the next five years.

"Then only long-term investors specially industrialists will be able to get their return on investment," he said.

He said CNCI likes to see policies and tariff taxation remaining for five years and not for one year.

Multiplicity of taxation was also expected as the present tax system is highly complicated. He hoped proposals made by the CNCI will be implemented. Sectorial development with technology, R and D was another expectation of the CNCI.

Joint Apparel Association Forum Secretary General Rohan Masakorala said measures that would eliminate delays and unwanted systems was needed.

The laws should be supportive and need to increase efficiency. The laws should encourage Sri Lanka to achieve as a hub in the region. The implementation of e-

commerce, a better tax structure and the five-year comprehensive plan are important in this regard.

Proper reforms and modernizations are necessary if the country to become a high-end apparel destination.

The shipping sector in the country is progressing well.

However, the sector too needs reforms in Customs and port procedures. The Government needs to focus on human capital investment. More attention is needed on training and developing a human resource pool to deliver results, he said.

Chamber of Construction Industry Sri Lanka President Surath Wickramasinghe said the construction industry should have accessibility to funds. There is a need for an infrastructure fund.

The industrialists need to be given BOI concessions. These concessions should be given to both local and foreign investors who are willing to invest around US $ 10 million. Measures should be taken to stimulate the stalled property development projects and special incentives to facilitate the disposal of apartments.

"The payment of single service levy by the investor needs be considered. Research and development should be made an allowable expense. The tax incentives should not be withdrawn until a mega project is completed, he said.

SLASSCOM General Secretary Madu Ratnayake said the Government needs to pay more attention on brand building in the IT and BPO industry to reap economic benefits whilst achieving due recognition for the industry.

Priority should be given to expand the capacity building in the IT and BPO industry giving concessions, financial assistance and expertise to universities and relevant educational institutions to initiate relevant programs and projects to make this objective a success.

"An appropriate tax regime should also be introduced for the IT and BPO industry to be more competitive in the international IT and BPO industry," Ratanayake said.

Women's Chamber of Industries and Commerce (WCIC) Chairperson Vidyani Hettigoda said that they expect the budget would be encouraging and supportive especially to develop business and promote industries where women entrepreneurs are involved.

"We hope this year's budget would create more business leading women in Sri Lanka. Women entrepreneurs play a key role in contributing immensely to the country's economy," she said.

At present the majority of the population in Sri Lanka are women. Therefore, we believe and trust that this budget will support and encourage women starting business from micro level.

Tourist Hotels Association of Sri Lanka (THASL) President Anura Lokuhetti said President Mahinda Rajapaksa has identified tourism industry as a major thrust industry for the development of economic activities of Sri Lanka.

"We are optimistic that the Government will introduce uniform track systems for the betterment of the industry.

The hoteliers expect this budget will at least introduce some major tax incentives to attract more investments to build 15,000 additional rooms to achieve 2.5 million tourist arrivals by 2016," he said.

In achieving 2.5 million tourist arrivals, foreign exchange revenue will accomplish around US $ three billion while creating 200,000 direct employment.

"The World Travel Mart in London was a clear indication for a major growth in tourist arrivals in the current winter period", Lokuhetti said.

The Leather Advisory Council will be looking forward in further reduction of taxes and the results of the taxation commission after the budget, Leather Footwear Advisory Council Chairman Rangith Hettiarachchysaid.

"The industry should improve in terms of competitiveness to meet the standards of the export market.

There should be an improvement in the technical knowledge, product development and creation of various avenues for the private sector to deliver a higher productivity," Hettiarachchy said.

The Gem and Jewellery industry is anticipating duty waivers or reduction for importation of tools, machinery and equipments for the lapidary and manufacturing industry, Sri Lanka Gem and Jewellery Association Secretary Ziqufi Ismail said.

He said several proposals have been submitted to the Government for consideration which he hoped will be considered favourably at the budget.

“We have proposed to consider the renewal of NBT while liberalizing trade on import and export of gem trade. We have also requested the Government to liberalize the foreign exchange policy for the import of raw materials to cut and polish gemstones and rough gems,” Ismail said.

Spices and Allied Products Producers’ and Traders’ Association Chairman Christopher Fernando said the action need to be taken to stop pilfering of agriculture products and for a subsidy scheme for re-planting and new plantings.

It is important to provide financial assistance for the producers and exporters to encourage them to perform well.

“The industry needs longer tax holidays, investment relief and an attractive subsidy scheme to ensure low cost of production. They request to re-activate the export rewards scheme for the benefit for the industrialists,” he said.

“The cess imposed on importation of export oriented raw material, machinery and equipment should be withdrawn. These will help the spice industry to be a major contributor in foreign exchange generation,” he said.