Chambers welcome progressive budget

Business desk

*Business Chambers hail the development oriented budget as a positive move that will supplement the country’s rapid economic growth.

*The Daily News spoke to a cross section of the country’s Business Chambers for their views on this year’s budget.

* The National Chamber of Commerce of Sri Lanka (NCCSL) President, Lal de Alwis said this budget is very encouraging. The budget is fully focused on a major development of Sri Lankan economy, he said.

Several important taxations have been liberalized as the Chamber had also suggested and has offered incentives to investors and agricultural industry. “The Government is targeting at reducing the inflation rate and we are confident that the trade deficit could be covered up as it has been brought down further. In this investment friendly environment, the private sector and investors could expect more Foreign Direct Investment (FDI) to flow,” he said.

“Overall it is a very encouraging and investment friendly budget, which is a good strategy and a timely appropriate in the long-term aspect. Economy will march forward as the budget is well designed to develop the country with a higher economic growth,” Alwis said.

* The Tourist Hotels Association of Sri Lanka (THASL) President, Anura Lokuhetti said this is one of the best budgets focused on a great vision to develop the country. “The budget has covered all sectors with a view of developing the country’s economy in a substantial manner,” he said.

“Tourism industry particularly has been identified and understood as a thrust industry. The Provincial Council taxes have been withdrawn while income earning taxes related to the tourism industry have been brought down from 15 percent to 12 percent. This reduction of taxes is encouraging especially to the hoteliers as they could re-invest this money on expanding the room capacities and refurbishing the existing hotels,” he said.

Lokuhetti said this budget is a positive indication to all Sri Lankans to have many hopes with the country targeting at creating a major economic development in the years to come.

* The Women’s Chamber of Industries and Commerce (WCIC) Chairperson, Vidyani Hettigoda said, the budget is very promising and fully focused on developing the country’s economy with a macro approach.

The budget has aimed at micro level business entrepreneurs to large scale businesses which is highly encouraging. Liberalized taxation structure, introduction of new technology in Research and Development (R&D), agriculture and Small and Medium Enterprises (SMEs) will enable to target more on export oriented businesses and attract foreign exchange earnings towards the country.

“Education have been highlighted while identifying Information and Communication Technology (ICT) as a key sector, which I believe is vital for businesses that are starting in the new era of Sri Lanka,” she said. “With these favourable incentives we expect that women entrepreneurs would create more business while having a prosperous future,” Hettigoda said.

*The Joint Apparel Association Forum Secretary General Rohan Masakorala said that they are extremely encouraged by the budget and happy that the Government has taken measures to work towards a reform agenda and streamlining of procedures.

The policy statement is directed towards implementing the five year comprehensive plan by the apparel sector aiming at the country becoming a regional hub.

It focuses on making Sri Lanka competitive in the global market and the streamlining of institutionalized services by way of e-commerce approvable for trade. The proposed investment fund with regard to technology and research and development is timely, he said.

Research and development will benefit the apparel industry especially the SME sector. Overall, this will be a very good input. The industry will be looking forward to its five year strategic plan.

The shipping industry will benefit from the attention paid by the Government with regard to the anti-competitive practices. There are practices that are not accepted in operation currently and the Government’s intervention is welcome. This would provide a conducive environment for the service enhancement, he said.

“The budget has a very clear vision and the Government is serious about making Sri Lanka five hubs. The policy statement has spelt out the direction and we could expect the implementation in the coming months. This has created a better environment for Sri Lanka to move forward and to sustain the rapid economic growth,” he said.

* Spices and Allied Products Producers’ and Traders’ Association Chairman Christopher Fernando said, “The policies related to the spice industry is favourable and we are encouraged to improve our production”.

“It is heartening to note that the Government is considering the spice industry as an important sector in its development drive. The sector will be looking forward to the Government’s continued support to make the spice industry vibrant and dynamic while generating foreign exchange and employment. The industry aims at becoming a world renowned spice centre making Sri Lanka famous.

The support from the Government in its Gama Neguma program for the spice industry is timely,” he said.

* Corporate personality Rohantha Atukorala said Sri Lanka had already gained 17 places in the World Economic Forum rankings from 79 to 62 prior to the budget.

The simplification of the tax structure in the 2011 budget proposals will help the country improve these ratings further.

“The budget is clearly a developmental budget but the challenge is how we drive implementation on the ground with a Private-Public- People partnership approach, so that the common man sees the impact than just the Western Province,” he said.

* Ceylon National Chamber of Industries Chairman Sunil Liyanage said the proposal to increase productivity of industries by five to ten percent is welcome because it will make the industries competitive.

He welcomed the creation of the fund for innovation and technology.

The package of assistance for SMEs including waiving off of taxes also is a good move because it will help SMEs to develop.

Increasing the tax free allowance for PAYE tax to Rs 600,000 and waiving off of tax on ETF and EPF is a welcome move for private sector employees.

Widening the tax base to the public sector is also a good move because the Government will get a good revenue, he said.

* The Chamber of Construction Industry Sri Lanka President Surath Wickramasinghe said that the budget is progressive and focusing on the challenges to the construction industry.

“We are pleased that some of the bottle-necks faced by the construction industry in implementing projects have been addressed in the budget especially the proposed Ministerial Committee to fast track project approvals within six months.

Since there are several taxes levied by the Government agencies on developers and investors, the budget proposed a single payment or equivalent for processing of plans which is most welcome, he said.

“We are pleased that the budget provides for training of skills for construction as well as for research and development to bring down the cost of construction being treated as an allowable expenditure for income tax purposes,” he said.

The VAT and duty concessions for the import of construction machinery being reduced from 15 percent to 13 percent is timely. The reduction of corporate taxation for construction companies from 15 percent to 12 percent is heartening. The need for foreign consultants and contractors to collaborate with the local counterparts in all construction projects is a long felt requirement, he said.

“The construction industry sub-contractors have been exempted from the Nation Building Tax which is a good move. The streamlining of the structure enhancing the tax free allowance up to Rs 600,000 will benefit the professionals.

“We are pleased that Rs 1 billion has been provided to attend to the neglected public assets that are incomplete in construction related projects,” he said.

Increasing the threshold of the income tax from Rs 300,000 to Rs 600,000 will be a beneficial factor for the private sector industrialists.

Personal tax rate for the leather and footwear industry is reduced from 35 percent to 24 percent which will be a relief to the industry, Leather Footwear Advisory Council Chairman, Rangith Hettiarachchy said.

He said the removal of turnover tax charged by the Provincial Council is an encouragement to the Small and Medium Enterprises (SMEs) and at large to the industry directly.

The Government has a plan to reconsider the BOI investments which is a good move for the industry.

“The proposed pension scheme for the private sector is a good proposal which should not be an extra burden on the industry. There should be a simplified payment system in place once the pension scheme is implemented,” Hettiarachchy said.

Concessions granted for Research and Development (R&D) expenses is appreciative which will result in new product developments in the sector.

The present budget has a pragmatic view of the country being in the forefront as an exporting hub in the region and the world at large in the near future.

Most of the proposals made to the Government has been taken into due consideration, the Sri Lanka Gem and Jewellery Association Secretary Ziqufi Ismail said.

The import of raw gem stones is encouraged by increasing the foreign exchange allowance grant in five folds to US $ 50,000 per person. This is an opportunity to liberalize the trade and import gem stones to our country for value addition and re-export, he said.

“The Government has taken due consideration to undertake a national survey to access gem mining in the country which is an encouraging initiative,” he said.

“We also noted that the total removal of CESS on value added goods and the reduction of taxes on machineries will enable the country to compete with global technology. Reducing income tax is the most needed and correct measure taken to liberalize the trade and to be a forerunner with competitiveness in the world market, he said.