By Hiran H.Senewiratne
None of its 18 proposals, focusing on developing the industrial sector, has been included in the 2024 budget, although they were presented to the authorities in the lead-up to the formal presentation of the latter budget in parliament, the Ceylon National Chamber of Industries (CNCI) said.
“But as a Chamber we are pleased with the 2024 budget, which allocated Rs 50 billion for the development of micro and small industries, because the SME sector is now going through a major crisis due to the current economic conditions, CNCI chairman Kevin Edwards said at a media conference last week, held at the CNCI head office at Galle Face Court.
“A number of SME industries were shut down or closed down owing to the C-19 pandemic and the economic crisis, which pushed them into huge debt and it is the need of the hour to take steps to assist them. Obtaining a loan from the Asian Development bank to assist the SME sector was a good move but more clarity is needed on its implementation, Edwards said.
Edwards added: “There needs to be a relook at the high electricity tariff for the industrial sector, which negatively impacts the competitiveness of local products in the export market, which is very much higher than the tariff in other countries of the region. Today a unit of electricity in Sri Lanka is around Rs. 40, while in India it is Rs. 30 and in both Vietnam and Thailand it’s around Rs. 20.
“We have requested the authorities to add more infrastructure to the Railways, enabling more goods to be transported by rail, which will be cheaper and would save fuel as well.
“We have given more emphasis to signing Free Trade Agreements with Bangladesh, Thailand, China, Singapore and many more countries to increase trade and investment for Sri Lanka as well as build on foreign reserves.
Deputy Chairman-CNCI, Pradeep Kahawalage, said that the increase of VAT from 15% to 18% will contribute towards the revenue collection in a big way.
“In addition, getting more eligible people to pay taxes by widening the tax net will also help to increase government revenue.
Kahawalage added: “New tax payers would be roped in as it will be made compulsory to have a Taxpayer Identification Number (TIN), whenever a person opens a current account at any bank; obtains approval for a building plan; registers a motor vehicle or renews licenses and registers a title to land.
“These measures will help non-taxpayers to open more tax files resulting in gaining more tax revenue. The PAYE tax too has not been reduced, which will help the government to gain more tax revenue. The government hopes to achieve revenue of around Rs. 4,127 billion and 93 percent of it would be from tax which is achievable.
“The construction industry is one of the worst affected sectors in the country but the 2024 budget has allocated Rs 55 billion to revive the sector but that amount is hardly ample because it has already lost Rs 200 billion.”