Budget focuses on reducing deficit

Chamber heads and business personalities expressed satisfaction over the 2014 Budget which is focused on reducing the budget deficit and boosting economic growth in the coming years.

Sri Lanka Shippers’ Academy, CEO Rohan Masakorala said that he was pleased that the government was keen on bridging the budget deficit and promoting a vibrant export industry. “We commend the move by the Government to create a competitive environment for exports and providing facilities for exporters.

The Shippers’ Academy hails the strategic move to boost exports by focusing on new markets,” Masakorala said. He said the Budget has focused on building skills for small and medium sector enterprises which make a salient contribution to the economy.

The government has taken steps to increase revenue and bring stability to the economy.

The government has set a target of achieving aneight percent economic growth rate in 2014 with inflation to be in the mid single digit and the budget deficit to be slashed to 5.2 percent of gross domestic product.

The budget also proposes several relief measures for the public which was commended by the business community. The Cost of Living allowance for state workers will be increased by Rs.1,200 from January 2014 and Rs. 1,000 million for a farmer pension scheme. Capital market experts said that tax concessions to encourage more companies to list on the Colombo Stock Exchange was a good move that would stimulate capital market growth. The budget proposed a three-year, half tax relief when listing new companies on the CSE. Managing Director, IFS Sri Lanka, Jayantha de Silva said that the 2014 budget was focused on achieving long-term goals.

“We are happy that the government is concerned about long-term benefits to drive growth. The IT and BPO sector received benefits in the last Budget and we are happy it has not been done away with in this Budget.

IFS hails the move by the government to promote Hambantota as a hub for Information and Communication Technology in South Asia.

Chairman of the Tea Advisory Committee, Ministry of Industries, Rohantha Athukorala said that the focus on exports is commendable. The tax-free status for royalty income for a seven-years period and the facility to import speciality tea for value addition with 75 percent home grown tea will help boost international marketing. The drive for bilateral trade with access to Japan, China and Indian markets further substantiates the international marketing drive than mere export development.

Vehicle Importers’ Association of Lanka, Secretary Keerthi Gunawardena said that though the vehicle import duty has not been raised directly, the depreciation table has been changed and the number of slabs which was four has been brought down to two affecting the prices of vehicles. The duty on first year vehicles which was 80 percent has been increased to 100 percent and the duty on second year vehicles has been increased from 70 percent to 90 percent. Industrial Development Board Chairman and Advisor to the President Nawaz Rajabdeen said that Rs. 90 million to fund low-cost, energy-efficient technologies for industries, has been proposed in the Budget.