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| Sunday, 3 November 2002 |
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| News Business Features Editorial
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NCE recommends incentives for exporters The National Chamber of Exporters of Sri Lanka (NCE) has submitted its proposals for the Budget 2003 for consideration by the Government. Here are some of the important points; Incentive schemes for value added product exporters a) Exporters of value added products who can increase exports by 10 per cent in a calendar month, over the average of three previous months to be entitled to an incentive equal to the incremental value of export in rupee terms; b) The scheme to be valid for a further period of one year and to be reviewed thereafter; c) This scheme to be implemented through commercial banks; d) The scheme should apply for all value added product exporters except exporters of tea, rubber, coconut in primary form, gems, apparels and diamonds. Value Added Tax VAT for professional services is 10 per cent and for any other services, 20 per cent. The NCE has requested other services also to be taxed at 10 per cent. Profits made on export earnings should be exempted from income tax to keep such companies on a level playing field with BoI companies. Tariff Commission and anti-dumping issues The Government should address issues on Tariff Commissions and imports affecting domestic industry disadvantaged due to dumping by expediting the introduction of anti-dumping laws which should be strictly enforced and administered through the imposition of special levies; Stringent quality standards should be imposed for imports, similar to the standards our exports are subject to in other countries. High electricity charge A special tariff for exporters in keeping with the electricity charges in other regional competitors as exporters have to compete in international markets with these countries. Reducing transaction costs to improve competitiveness Reduce BoI charges, which have increased transaction costs; Introduce on a priority basis an e-governance framework extending through the public service, supported with infrastructure, support systems, networks and accountability driven leadership; Introduce customs validation and examinations using x-ray facilities for both incoming and outgoing cargo. Deregulating procedures Reduce delays and simplify the application system when registering with government institutions; Review and amend all environmental restrictions to reduce excessive restrictions and expedite the process in environmental impact assessments; Relax unnecessary regulations and bureaucratic procedures; Introduce a dynamic banking support system;Develop e-commerce to facilitate speedy transactions with key government institutions encouraging e-commerce solutions. Software development industry Several ministries and several State-sponsored bodies (sometimes in the same Ministry) are involved in the software industry. They should coordinate their efforts instead of working in compartments. Finance Financial assistance to industrialists through public sector banks is very slow. Public banks should improve the documentation system and expedite the process of granting approvals. They should also liberalise the collateral required by banks as security. Incentive scheme for bio-technology To provide an incentive scheme to promote bio-technology from its embryo state to higher levels. Appoint Ombudsmen in Inland Revenue Department This should be a top priority because assessments done by the Department sometimes are not satisfactory to some industrialists. Competition with other exporting countries in the region Appoint a committee to identify areas in Sri Lanka that are less costly to investors to manufacture products for export so that exporters could compete with regional countries; a) Withdraw immediately the 75 per cent import duty imposed as Port Development Charges which was introduced recently as it affects the profitability of export-oriented companies; b) There should be no terminal handling charges. This should be incorporated to the competitive freight rates by different shipping lines; c) Bring about labour reforms to attract foreign investment and follow the recommendations submitted by joint chambers. |
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