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| Sunday, 16 November 2003 |
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Call for budget focused on infrastructure development, streamlined tax collection by Hiran H. Senewiratne The Budget 2004, which is expected to be presented in Parliament this week, should focus on infrastructure development and monitor and streamline all activities of revenue collection bodies to make the tax collection structure more efficient, industry sources said. The Sunday Observer Business spoke to heads of trade chambers to get their views on the budget. Chairman, National Chamber of Commerce Sri Lanka (NCCSL), Asoka Gunasekera said the forthcoming budget should give priority to infrastructure development in the country. He said the Colombo South and Hambantota Port development projects should be expedited to achieve rapid economic development. The Chamber recommends the removal of the two per cent import duty and 20 per cent surcharge on commercial vehicles, especially vehicles with more than 28 seats, to improve the transport service, he said. Gunasekera said the Government should reduce tax on agricultural machinery which is required for agricultural value additions. He said the urea subsidy should be increased from Rs 6,000 to Rs 10,000 for a metric tonne, which is widely used in the paddy, coconut and vegetable sectors. He said that introducing a subsidy for 'Muriate of Potash' is important to ensure high yields in the agriculture sector. The Government should also focus on the development of small and medium-sized industries, which consist of a considerable proportion of industries of the country. He also emphasised the importance of education reforms. The NCCSL also recommended the rationalisation of the number of holidays and the nature of national holidays for the purpose of providing an uninterrupted service to the production sector. The reduction of the industrial rate of power for the local industries is the need of the hour, he stressed. Vice President, Ceylon Chamber of Commerce (CCC), Deva Rodrigo said the forthcoming budget should pay attention to identifying and stopping revenue leakages in the country. He said the Government should monitor and streamline all activities of the revenue collection bodies to make the tax collection structure more efficient. Rodrigo said the Sri Lanka Customs and Excise Department are two bodies that should be monitored to create greater efficiency. Rodrigo, who is the President of the CCC Budget Committee, said VAT collection should be brought into a single rate or band to avoid inconveniences to the public. He recommended that this be increased upto 20 per cent. A lot of business organisations are not registered though they are requested to register, resulting in the country losing large sums of money as revenue, he added. Rodrigo also recommended the introduction of a tax audit mechanism with the participation of the private sector to avoid tax collection inefficiencies. Tax benefits for pensioners is one of the areas that need to be focused at the forthcoming budget, he added. CCC also recommended the implementation of the Fiscal Management Responsible Act through the budget. Chairman, Ceylon National Chamber of Industries (CNCI), Ranjith Hettiarachchy requested the Government to allocate more funds for infrastructure development to promote foreign direct investments at the forthcoming budget. He said the private sector is reluctant to invest on infrastructure development due to the pay back period being long. Hettiarachchy also emphasised the need for a very progressive duty regime for industries to grow. He said that one single tariff band is detrimental to the industrial sector. Therefore, the CNCI recommended at least three tariff bands based on finished products and semi-finished products. He said that raw materials should be exempted from all tariffs. Chairman, Budgetary Proposals Committee of the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), Granville Perera said the Federation expects personal and company tax to be reduced so that it will help free circulation of money in the country. He said when money is being freely circulated in the country, people will have greater opportunities to invest in various business activities. The FCCISL also recommended combining the Employees Provident Fund and Employees Trust Fund. Perera, also the Vice President of the International Chamber of Commerce Sri Lanka, recommended a difference between lending rates and deposit rates of around two per cent, in keeping with international standards. |
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