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| Sunday, 29 May 2005 |
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Business |  |
| News Business Features Editorial
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Recommendations to overcome Indirect Exporters' problems Lack of policy recognition, absence of a level playing field, exchange control issues and the absence of a business support service are the main problems faced by Indirect Exporters (IE) in the country. Although they play a vital role to promote exports the value of their contribution has not been understood or properly assessed by policy makers to evolve a policy to develop the sector. According to international experience the export success of most Asian nations is attributed to the role played by the Indirect Exporters. It is said that 60-65% of value addition in South Korea has been generated by IE. It is mainly due to various incentive packages given by those countries. In contrast the incentives and institutional arrangements and other support programs available to IE in the country are inadequate for the realisation of their full potential while contributing to accelerate the country's economic performance. After representations were made by IE to the Exporters' Forum in July 2004 Finance Minister Dr. Sarath Amunugama and the Secretary to the Treasury Dr P.B. Jayasundera requested the Export Development Board to appoint a 21-member committee to study the present status of IE and to work out a strategy to overcome the problems encountered by them. The committee identified the problems and issues faced by the IE and submitted their recommendations. Creating a unit in the EDB dedicated to IE, carry out a survey on direct and IE, registration and developing a data bank on IE and including information on IE in the EDB website have been recommended to overcome the issue of lack of information on IE. At present there is no mechanism to discuss issues on the IE sector and the committee suggests the setting up of an advisory committee for IE. As a solution to the absence of a level playing field for IE the committee recommends equal tax concessions, expediting the VAT refund procedure, extending the deferment facility for VAT at the point of imports for registered IE and to provide a mechanism for exempted products supplied by IE to exporters to be given input credit. The committee has also recommended that publicity be given to all available concessions under government agencies, publish a monthly newsletter to be circulated among IEs, support IE in every possible manner and help IE to prepare viable projects. (SG) |
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