'Uninterrupted imports may cause inflation'
 The National Chamber of Commerce of Sri Lanka welcomed the
concessions offered to citizens in the form of reduction of special
commodity levies, reduction and removal of certain Customs duties on
essential food items, reduction of petrol, diesel, kerosene and LP gas
prices, reduction of retail prices of milk powder and bread which will
enhance the quality of life of citizens, a media release said.
Increase of PAYE threshold, increase of salaries of the public sector
employees and pensions also will increase the purchasing power of the
people.
"Measures taken to enhance the quality of life of the people will
induce a somewhat subdued consumption pattern on the people. However, we
raise a word of caution similar to the previous Budget concluded in
October 2014, with regard to inflationary trends that can emerge if
there is an uninterrupted flow of imports with improvement in the
disposable income of the people through the reduction of prices and
increase of salaries.
"Careful management of currency stability at this juncture is of
paramount importance. Various one-off levies such as a 25% one-off tax
on profits from companies and people who have earned profits over Rs.
2,000 million in the tax year 2013-14, special levy of Rs. 1,000 million
on casinos, Rs. 1,000 million levy on satellite operators and levy of Rs.
250 million on licensed mobile operators immensely supported to maintain
the budget deficit at the expected 4.4% level of the GDP.
"We would like to raise our concerns regarding the sustainability of
government revenue streams in the future in the absence of one-off
levies.
"We believe that income tax concessions offered for the profits from
projects through investments in lagging regions, vegetable and food
processing industry and the proposal to introduce new export processing
zones under the BOI will have a positive impact on the economy.
"We also welcome the introduction of the minimum purchase price for
paddy, potatoes, tea leaves, rubber and fresh milk," the release said. |
