Proposals for exports, banking, agriculture, SMEs:

FCCISL chief outlines 2012 Budget wish list

Ravi LADDUWAHETTY

New President of the Federation of Chambers of Commerce and Industry of Sri Lanka Kumar Mallimarachchi outlined a series of proposals of the Federation for the 2012 Budget to be presented in November.

“We appreciate the business friendly budget of 2011 and hope the same business-friendly economic, fiscal and trade policies, particularly reforms proposed in the taxation system will be pursued in the preparation of Budget 2012”, he told Daily News Business yesterday.

Commenting on the export sector, he said: “We suggest harmonizing the complex documentation procedures and introducing electronic cargo clearing system and single window approval procedure to reduce costs and transit times of exporters and importers, which will enhance our competitiveness,” he said.

A harmonized payment system at the regional level for SMEs and a single window clearing centre was also proposed.

He also urged the government to expedite legislation introduced in the 2011 Budget against anti- dumping, counterveiling and safeguard legislations to protect domestic industry.

He also welcomed the current low interest rate and noted the scope for further reduction, considering market liquidity. “We suggest at least State banks set better benchmarks in narrowing gaps between buying and selling rate of foreign exchange which would benefit the SME sector,” he said.

The non availability of hybrid and improved seed material was another drawback encountered by farmers, he said, and proposed considering imported duty free seed material.

It was proposed that the 2 percent NBT Levy on trade, industry, manufacturing and services should not be levied on turnover, but on commission (e.g. for lottery tickets sales agent) or net profit.

He also proposed increasing duty on apparel products from Thailand, Malaysia and Indonesia to protect self-employed local manufacturers.

He also proposed regulations be enacted for EPF, ETF and PAYE Tax payments to be made through one document to one institution for operational convenience.

The need to exploit vast potential of livestock industry, particularly in the Eastern Province through exemption of import duty and VAT for Agri-Livestock equipment was also stressed.

It is also proposed to waive interest accumulated on non-performing loans given to the SMEs on account of armed conflict hitherto in the Northern, Eastern Provinces.

“At least the State banks should consider offering loans to SMEs on the basis of their cash flows, rather than high-value collateral,” he remarked. A mechanism was proposed to monitor stalled projects using the Regional Chamber Network and the District Enterprise Forum set up by the Federation.

“This could be empowered by the Government to play an important role,” he said.