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| Sunday, 6 November 2005 |
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| News Business Features Editorial
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2006 Budget - Masses optimistic by Surekha Galagoda The masses are keeping their hands crossed of what concessions they will enjoy when the UPFA presents its second budget on November 8, on the eve of the Presidential election. The UPFA presented its first budget in 2004 in keeping with their long term development goals of poverty alleviation, agriculture, SMEs, development of the rural masses and infrastructure development. Hopefully the forthcoming budget will cater to the same long term development goals and the manifesto presented by its Presidential candidate Mahinda Rajapakse. The trade chambers in the country presented their proposals for the budget to Finance Minister Dr Sarath Amunugama last month. The recommendations submitted by the National Chamber of Commerce of Sri Lanka (NCCSL) focused on macro issues as well as sectoral issues targeting an 8 percent GDP growth for the next five years. The NCCSL said that ad hoc policy changes will adversely affect the targeted GDP growth. A mid year review on the progress of implementation of the proposals is of paramount importance. Recommendations on the macro issues include achieving permanent peace, Infrastructure development, maintaining law and order, not subjecting local Industries to unfair competition by cheap imported substitutes and regional development. The other recommendations of the NCCSL include removing the restrictions enforced in the application of TIEP and Duty Rebate Schemes, Permit customs clearing of imported raw material during weekends and public holidays in addition to the normal clearing hours on week days, allow registered tea manufacturers to import vehicles used for transportation of green leaf free of import duty, Grant incentives to install specially designed racks in vehicles especially in lorries and tractor-trailers for transportation of green leaf, encourage usage of light weight TRI plucking baskets by offering incentives and quality plastic crates which could be re-cycled to hold green leaf during processing in the factory by offering incentives. NCCSL also proposed to introduce an incentive scheme to import energy efficient dryers and technologically advanced machinery that run on fuel other than diesel and furnace oil. Taking into account the new developments in the export markets, the NCCSL also pointed out the importance of introducing a subsidy to upgrade tea factories to meet HACCP certification requirements, allow importation of manufacturing/ processing machinery, packaging equipment and appropriate flooring/tiling material free of import duty are also in the list. The NCCSL demands stress on more incentives to develop important infrastructure such as subsidies for exporters to build and operate modern export orientated warehousing complexes. Removing VAT on locally manufactured coconut oil,restricting importation of all edible oil to consumer packs and discourage importation in bulk form, encourage more value addition on coconut products through introduction of tax incentives, exempt the fast moving parts of two wheel tractors (agricultural machinery) from VAT by identifying them through a separate national sub heading. The recommendations on tariff and taxes submitted by the NCCSL include the introduction of a mechanism to refund VAT and income tax overpaid by businesses with no delay, permit to carry forward or set off Withholding Tax levied on Partnerships/Enterprises, if paid in excess and withdraw the deemed distribution of dividend by introducing amendments to the Inland Revenue Act. The Ceylon National Chamber of Industries budget proposals focused on the manufacturing Industry and national issues which are directly affecting the economy. |
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