Implementation of Budget proposals, evaluating impact vital | Daily News

Implementation of Budget proposals, evaluating impact vital

The Budget proposal to expand Sri Lankan Government’s IT initiative to facilitate Arts to the Science internship program, where the industry would train 1,000 unemployed youths, mostly arts graduates through internships for one year in IT-BPM, KPO firms, would be a distinctive initiative to reach the government’s ambitious target of creating a more vibrant IT sector.

As Sri Lanka is emerging as a global ICT destination of choice in a number of key focus domain areas, the BPO sector would be one of the key sectors in Sri Lanka’s economy, which is booming at a fast pace. As part of this initiative, 50% or up to a maximum of Rs. 5,000 of the monthly salary of the selected youth for a period of 12 months, would be borne by the government. To this end, the government has already allocated Rs. 300 million. Sanjee Balasuriya, Managing Director, Chief Executive Officer and Founder of the eCybersec told the Daily News Business.

Senior Tax Consultant Piyadasa Guruge said, “as far as taxes are concerned, certain budget proposals by Finance Minister Mangala Samaraweera in his budget speech this year, may not really affect the overall revenue generation in a big way.” Budget 2019, has proposed certain adjustments to the Inland Revenue Act, to facilitate implementation and also address some pertinent questions of the industry, he said.

“Also, I believe certain proposals would help make matters relating to taxes more simplified,” he added.

The 2019 National budget proposes a mix of measures to balance the short-term macroeconomic pressures in the economy with the long-term development agenda, The Ceylon Chamber said.

We acknowledge the efforts of the government in not delivering overly populist proposals as expected in the lead up to the budget. There exists a lack of connectivity with the overall vision proposed by the government through the Vision 2025. However, we feel it is a more realistic budget given the present political economy of the country.

The GDP growth estimates provided in the budget speech, for the period from 2019-2024 is of concern as it only expects growth to gradually rise from 3% in 2018 to 4.8% by 2024. The growth estimates for this period is not a positive signal for the business climate. The 2019 Budget does not address some of the fundamental issues of the economy such as State-Owned Enterprise reform that would enable Sri Lanka to move towards a higher economic development trajectory.

The Ceylon Chamber welcomes the inclusion of certain budget proposals formulated by the Chamber after robust consultations with its membership. We hope that these and other laudable proposals in the budget will not be confined to the speech but that timely action will be taken to implement them in consultation with the private sector. This will be further challenged given that the effective implementation of the proposals will be limited to a nine-month period. The past performance of the Government in implementing Budget proposals has been disappointing. 

It is our hope that Government will be serious about implementation and that the expectations from the proposals will be realized.

Sri Lanka has always presented strong budget proposals but the issue is the implementation of them and evaluating the impact to the economy,” said Economist and Former Chairman Sri Lanka Export Development and Board & Sri Lanka Tourism Promotion Bureau, Dr Rohantha Athukorala.

“There were two noteworthy budget proposal one in the export sector and other in the tourism industry,”The budget proposal also included a proposal for Ceylon cinnamon to be supported to obtain and maintain Geographical Indications (GI), in line with the country’s policy to protect the identity of its products. “This will sure help the branding of Ceylon Cinnamon and the development of this industry similar to Ceylon Tea that can garner higher export revenue per kilogram.”

The online booking/reservation website, can register hotels and similar establishments offering more than 5 rooms per property, only if such establishments are registered with the Sri Lanka Tourism Development Authority (SLTDA). This will help the overall quality assurance process of the industry.

Meanwhile The Ceylon Motor Traders Association (CMTA) said that they understands the Governments requirement to implement policies that will deter the import of motor vehicles, given the challenges Sri Lanka faces in terms of Balance of Payments and also the congestion in urban areas.

“The CMTA represents the interests of the world’s leading automotive manufacturers that are present in the Sri Lankan market. The association is in its 99th year and one of the oldest industry associations in Asia, and affiliated to the Ceylon Chamber of Commerce”.

The CMTA understands the Governments requirement to bring in a luxury tax on vehicles. However, they fear that if this taxation is levied based on invoice prices, duty revenue will be lost due to under declaration of invoice values by non-manufacturer authorised used car importers. Thus, the association has made representation to the Government that they will assist the Government to fix values for every make and model of vehicle imported for the purpose of administering the luxury tax, so any importer of such a vehicle will pay the same luxury tax, and so the tax levy cannot be manipulated.

The CMTA has also requested the Government to permit vehicles ordered and with already established LC’s to be imported on the basis of the duty structure prior to yesterday’s budget.

In terms of the development of the industry, the association makes the below recommendations; Legislate the definition of a ‘Brand New Vehicle’ as one that is exported by the vehicle manufacturer, directly to an importer that is under agreement to the manufacturer. This definition allows the differentiation of vehicles imported through the manufacturer that are covered by manufacturer’s warranty from other imports through non-legitimate channels, register all vehicle importers, by having them hand over their company registration certificate, confirmation from the Registrar of Companies that they have filed their annual returns, confirmation from the Inland Revenue Department that they have no taxes in default and finally confirmation from the Labour Department that their statutory dues are paid. This ensures all vehicle importers are compliant with the laws of the land and thus ensures a level playing field.

 


 

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