Budget maintains consistency

More focus on Research and Development:

Shirajiv SIRIMANE

The 2012 budget has forwarded proposals to continue with the strong economy maintaining an eight percent growth for another year Treasury Secretary Dr. P. B. Jayasundara said. Speaking at the first post budget seminar organized by the Inland Revenue Department at the Galadari Hotel last evening he said he was confident that the country could maintain an 8 percent growth in 2012 as well.

He said the budget maintained a 6.2 percent deficit which is one of the lowest. This was 8 percent in 2010 and was lowered to 7 percent this year. Commenting on some of the tax proposals for 2012 he commented that they did not want to introduce new taxes nor wanted to depend on fresh taxes.

“We maintained the same structure and further simplified it to help the private sector and also maintain consistency as requested by many,” he added.

Dr. Jayasundara said for a country to surge ahead research was very important and great emphasis was laid on this.

“The government has so many research institutions and this budget has made provision for both the private sector and the government sector to share their findings,” he added.

However he said that nothing will happen immediately but gradually it would come into force.

He also disclosed plans to set up an IT park and promised to provide tax incentives to woo both local and foreign entrepreneurs. “The government’s aim is to raise earnings from IT from the current Rs 400 to 500 million to Rs. one billion and this was the reason for the government to focus on IT development,” he added.

He also said that with each budget new investors are being provided incentives and existing companies ignored. This budget has provided incentives for both new and existing tax payers,” he added.

Commenting on tourism he said it’s not just filling hotels and tourists enjoying the bio-diversity of the country and going to Singapore or an other country for their shopping. “We have introduced incentives where Sri Lanka can be a one-stop-shop for both,” he added.

He said there is high emphasis on skills development specially Sri Lankans going for overseas employment. “However when they return with their earnings there is no plan set for them and this budget has spelled out plans to entice them to invest in Sri Lanka.”

“For this the banking sector has to think in a novel way to woo them for investments and the three state banks would be making the initiative in this regard by way of development lending,” he added.

He said that to encourage the private sector to fall in line they would offer high returns when they engage in development lending.

Private banks would be further encouraged to borrow from overseas.

He also said that the Inland Revenue Department is never popular anywhere in the world and in Sri Lanka they are working towards changing this pattern.

[email protected]