Policy consistency hailed:

National Chamber welcomes positive budget

Ramani Kangaraarachchi

The National Chamber of Commerce of Sri Lanka (NCCSL) welcomes the budget proposal 2008 as a positive but challenging one as it aims to reduce the fiscal deficit to 7 per cent of GDP.

President NCCSL, D. Eassuwaren addressing the media at the Chamber said this will require strong fiscal discipline. He noted that there is policy consistency in presenting this budget.

He appreciated the fact that the budget has not placed additional burdens on the public despite the increased expenditure on national security and accepted that it was not possible to extend significant additional concessions by way of reduced tax in the current scenario including the prevailing political realities.

The proposed move to control tax holidays and in the medium term to reduce the tax rate is a progressive development at the macro level and the recommendations of the Chamber to simplify tax administration is appreciated, he said.

However the Chamber was disappointed that tax thresholds for private sector employees have remained static and has not been enhanced to compensate for inflation while the Government has not thought it fit to include the public service in the tax net despite the fact that over the last few years they have been the beneficiaries of significant salary increases and other benefits.

Eassuwaren pointed out that the proposal to improve a ceiling on taxes in arrears was fundamentally good provided it is implemented in a manner that would impose a requirement for the revenue authorities to be realistic and fair by the compliant tax payers when issuing assessments.

The incentives provided to key sectors, rural development and high technology machinery and continued commitment of the Government to upgrade the infrastructure of the country was appreciated. The Chamber was pleased about the President’s assurance given not to increase fuel prices and the subsidised loan scheme for the SME and agriculture sector.

Vice President NCCSL Asoka Hettigoda appreciated the opportunity given to Sri Lankan companies to borrow funds from the international market and exemptions given to local industries.

‘Exemption from tax to import high tech machines will make Sri Lankan companies to compete in the international market,’ he said.

Council Member NCCSL S.R. Balachandran said no Government can prepare a budget that could satisfy everybody and this time people expected an increase of prices on essential goods and VAT but there was nothing like that.

But it is not possible to give too much of concessions to imported food items because the local food producers must be protected and people can consume local food or pay a little more and consume imported food items, he said.

Balachandran said people can be happy that the tax structure is not adjusted and duty structure is properly looked after.

Also the Government is planning to import essential food items and distribute through 200 Lak Sathosa outlets at reduced prices to protect the consumer.