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The Ceylon National Chamber of Industries (CNCI) has proposed to the Government to place emphasis on national policies to further develop industries, in its budget proposals for 2003.

The CNCI said the interests of industries should be taken into consideration to create a conducive environment to increase productivity in the industrial sector. The CNCI submitted its proposals to the Treasury recently.

Some of the proposals highlighted include tariff reduction in electricity, infrastructure development, same concessions for Board of Investment (BoI) and non-BoI companies and allowing only local companies to be involved in trading activities.

"We are also concerned about the delay in the establishment of the coal power plant. We feel it is time for more than one coal power plant to be set up. Three sites have already been selected. These developments identified as national issues by all parties should be taken out of all political agendas," a Chamber spokesman said.

Among the budget proposals submitted by the CNCI are:

a) Reduction of budget deficit

b) Improvement of productivity in all sectors

c) Promotion of exports

d) Improvement of infrastructure

Some of the areas that must be looked at are:

i) The pruning down of all expenditure in the State sector, cutting out wastage

ii) Rationalising government departments and corporations and closing down those that are unnecessary. Appoint Chamber representatives to Government boardss

Policy directives for all State activities must be given to last for the next four or five years. Irregular changes in policy frustrates investment.

Holidays should be curtailed. Payment to the entire work force must be based on performance.

Infrastructure is in a depleted state. Priority must be given to the improvement of roads, major highways and the railways. These must be developed to ease congestion. Target dates should be fixed for building and completing new highways. This can be done even with limited resources. We advocate that the Railway gears itself on a priority basis to transport containers, thereby easing congestion on the roads and increasing the revenue of the railway.

On policies of the World Trade Organisation, all SAARC countries should get together to ensure that our concerns are met.

The 20 per cent surcharge on duties levied at present must continue to safeguard local industries. Industries must be encouraged to relocate to industrial zones by the granting of tax incentives such as 100 per cent capital allowance of relocation expenses. Industries based in rural and less developed areas should be given tax and other incentives or special infrastructure subsidies to offset their additional operational costs.

The present mechanism for the operation of parate execution is not satisfactory as it is weighted in favour of one party. Restructuring of enterprises must be examined by banks as is done in countries such as India and the USA. Provision for an appeal to an independent body is a necessity.

The local textile industry is in a state of collapse due to duty-free import of textiles. A measure of duty must be reintroduced to help the revival of the textile industry.

Entry and exit of production facilities and nature of businesses are now of shorter duration due to the fast changing global trading. Thus enterprises must be able to avail of the capital allowance within one or two years.

Exports should be encouraged with all possible incentives. Incremental increases in exports must be encouraged by allowing incremental profits to be tax free.

Efforts must be made to develop exports in areas where we have a competitive edge over other countries.

The private sector and Government must identify required policy changes to develop exports. The present sectoral reports prepared by the Ministry of Enterprise Development and the private sector should be considered as the basic policy paper. With every budget, steps should be taken for implementation based on these sectoral studies.

All State organisations must be called upon to prepare their corporate plans and make them public. Heads should be held responsible for their achievements.

Welfare facilities should be targeted to the needy.

An all party Parliamentary committee should be appointed to review the national holiday structure.

Legislation should be brought in to have all elections on weekends so that normal work is not disrupted.

To increase productivity, multiplicity of taxes should be avoided. These not only increase work, but the cost of collection and monitoring itself takes away part of the collection. Port Levy charge, charge for the computerisation of Customs, EPF and ETF are such instances.

Take immediate steps to amalgamate EPF and ETF.

Complete computerisation of the Customs work is long overdue. If it is delayed due to non-availability of funds, a certain percentage of income generated by the Sri Lanka Customs should be allocated for this purpose.

To improve competitiveness of companies, 100 per cent capital allowance should be granted on investment on computers and accessories, plant and machinery for modernisation of research and development, and testing equipment.

This needs to be extended to industries relocating in industrial zones or in less developed areas.

Testing equipment should be made duty-free. This will enable an increase in the quality standards of our products.

Greater transparency and accountability of Government officials from misuse of authority is required. Re-orientation of Government officials to understand and support business and commerce is necessary.

The Debit Tax on bank accounts should be removed. It discourages banking and could be regarded as another form of NSL.

The practice of having various forms of taxes and levies should be dispensed with. The country should promote productivity at every level.

NSL credit at the time of introduction of VAT cannot be set off against the VAT. It has to be claimed from the Department of Inland Revenue.

This has strained the cash flow of companies which are already undergoing difficulties.

A claim is not going to be paid easily and is costly; for the companies to reclaim and for the State to operate the refund. A set-off is required.

When a company has made an excess NSL payment and has a credit balance with the Department of Inland Revenue, this has to be set off against the Income Tax payment.

Give duty concessions on import of capital goods especially using advanced technology, as was available up to December 2001.

Exempt capital goods from the duty surcharge.

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