'Ad-hoc tax systems will hit exporters adversely'

By Sanjeevi Jayasuriya

A set of effective policies and maintaining a conducive environment for the private sector to continue the growth momentum was vital.

The Government should not engage in business and needs to take measures to create a level playing field among the business community to encourage better returns, National Chamber of Exporters (NCE) President Sarada de Silva told Sunday Observer Business.

"We welcome the government’s attitude towards good governance, accountability and rule of the law.

Looking at it from the NCE point of view, we maintain that exporters need to be competitive in the global arena to capture market share. Implementing ad-hoc tax systems and policies will adversely affect the business community especially exporters," he said.

The co-relation between export sector growth and economic growth is positive and, therefore, the progress made in the export industry will benefit the country, de Silva said."The entrepreneurs who need to take long-term decisions need policy consistency in terms of labour, tax and concessions and a conducive environment.

We expect the oil price reduction to have a favourable impact on exports," he said.

"We believe that the Export Development Board should re-energize itself and focus on meeting today’s export sector needs.

The Department of Commerce, Embassy offices with professional staffers could play a major role in enhancing the volume and value of exports," de Silva said.

The NCE, being the voice of exporters needs to be consulted on bi-lateral agreements and FTAs being proposed especially CEPA with India that is being discussed.

"We believe that the local manufacturing base must be further expanded to meet future export goals. We have no choice, but to encourage ventures as manufacturing units with FDIs for export. If we are to expand the manufacturing base we need joint ventures with foreign export companies to operate from Sri Lanka," he said.

The need of the hour is wealth creation, not wealth accumulation. In any business wealth is created in the market place. Sri Lanka’s manufacturing sector could grow at a fast pace with input by foreign and local joint ventures.

"We need to think afresh and go into high-tech value addition. We need to look at new growth sectors such as IT-BPO, food with value addition and be open to new development in the international market," de Silva said. As we cannot depend for long on our traditional exports, we should concentrate on small niche market products and large scale value addition to our raw materials. This will be a two-pronged strategy to increase exports and generate more foreign exchange to reach the targets set for the sector, he said.