Budget maintains consistent fiscal framework - CCC

The 2012 Budget maintains the consistent fiscal framework announced two years ago since the end of the war in 2009. The fiscal deficit is targeted to be reduced to 6.2% of GDP in alignment with the medium term projections. The Ceylon Chamber of Commerce (CCC) is pleased to note that the tax reforms announced in the last budget has been upheld in this budget with additional incentives to promote investments and a few further simplifications to the tax structure.

The Ceylon Chamber considers the move to depreciate the Sri Lankan Rupee as a signal on moving towards a flexible and a more competitive exchange rate regime as the Chamber strongly believes that a competitive exchange rate is vital for the development of the export sector which would bear on Sri Lanka achieving the investments (domestic and foreign) and growth targets set out in the Mahinda Chinthana policy document of the government.

The Budget’ focus on addressing the needy segments of the population, the rural economy/agriculture sector and the Small and Medium Enterprises will facilitate in uplifting the rural economy and the less-privileged people and support in development while enhancing efficiency of value chains.

In the Budget, the government has announced several infrastructure projects to be implemented in the next few years and the Chamber members look forward to partner with the government in clearly spelt out partnership models. With regard to the plantation lands which have been identified as lands that are not used productively and which are to be reallocated, the Ceylon Chamber proposes that any measure to reallocate lands should be taken in consultation with the Regional Plantation Companies, being mindful of the plantation management aspects.

The Chamber welcomes the many incentives for the private sector investments to new as well as existing enterprises and it is hopeful that the government will take further steps to improve the investment climate which is essential for the full use of the incentives offered.

The Chamber looks forward to working closely with the government towards assisting in the implementation of the proposals.

The Ceylon Chamber of Commerce is an effective spokesman of the Sri Lankan business sector. Founded in 1839, the institution has been the focal point for business contacts both locally and abroad for more than 172 years. It has many specialized committees, affiliated associations and 21 bilateral business councils promoting international business. Its members serve on various institutions and committees set up by the government and the private sector.