Ceylon Chamber commends continuity of enterprise Budget
The Ceylon Chamber of Commerce has welcomed the initiatives in Budget 2018 aimed at boosting trade and investment, improving housing ownership and the development of SMEs, and its overall consistency with strategies outlined in Vision 2025 and the Prime Minister's economic policy statement of October 2017.
In a statement the Ceylon Chamber has also commended the proposals to drive Sri Lanka towards becoming a more environmental-friendly economy, with an emphasis on improving access to finance for the development of enterprises, SMEs and startups.
The Chamber adds that National Budgets should focus on actionable outcomes within the relatively short time period of a year while facilitating the long-term vision, as opposed to being viewed as an all-encompassing policy document of the Government, and that Budget 2018 provides a good foundation for budgets to be viewed in this light.
However, it warned that measures to raise revenue through new levies could adversely impact industries that are also facing regulatory, investment and external challenges, and called for more clarity and consultation on proposals such as the removal of para-tariffs, reforming existing laws/acts and VAT exemptions (such as in the sale of condominium housing units). It adds that initiatives in shifting towards electric vehicles must be supported by a long-term energy plan that will complement the end objective of using non-fossil sources.
Extracts of the statement are reproduced below:
Focus on macroeconomic stability
While many proposals appear to complement the Government's medium-term vision beyond 2018, it is important that the Government does not waiver in the near-term from the current fiscal consolidation path.
The budget deficit target of 4.6% of GDP, set out for 2017 in last year's Budget, is expected to miss its target by 0.6% in 2017. While this is due to a higher interest expenditure than forecasted, it would have been mitigated if revenue grew as forecasted with the successful implementation of revenue proposals in the 2017 Budget.
The aim to reduce the deficit to 4.8% in 2018 is a less ambitious target compared to previous years, which is attainable if the tax revenue measures proposed in the 2018 Budget are implemented. This aim will be complimented by the new Inland Revenue Act, expected to come into effect from 1 April 2018. The continuation of fiscal consolidation will support monetary policy and help develop the recent improvement in macroeconomic stability with the build-up of reserves and improvement in the balance of payments.
The Ceylon Chamber of Commerce welcomes the initiative by the Finance Ministry to set up an Implementation Unit to monitor the progress of the proposals outlined in the speech.
The establishment of such a unit is greatly anticipated, given that a similar proposal was announced in the 2017 Budget as well, with a proposed committee comprising members of the private and public sectors to monitor the implementation process.
It is important to have confidence that the Government is serious about each of the many proposals announced in the 2018 Budget.
Too often have ambitious and laudable proposals been confined to the budget speech with a lack of implementation, creating an environment of policy uncertainty. There is a lack of attempts made to implement and honour these pledges. Some previous proposals that have remained unimplemented in recent budgets are repeated in the 2018 Budget. The Government will need to take serious steps to implement the announced proposals so as to improve its credibility.
A consultative approach to implementation
The Ceylon Chamber of Commerce hopes that the outputs and outcomes of the Implementation Unit will be available to the public as reported and include regular consultations with private sector organizations. The Ceylon Chamber is willing to engage with this proposed unit to provide feedback and input from the private sector on proposals that offer value to industry. It is important for the proposed policies to be implemented with specific timelines put in place beyond the preliminary indications outlined in the 2018 Budget speech. The above steps will help restore and renew public and investor confidence that desired targets will be met as planned.
While there is less ambiguity in a majority of the proposals, certain measures could have a negative impact on industry if implemented as mentioned in the 2018 Budget. Measures to raise revenue through new levies (Special Levy for Debt Repayment and Cellular Tower Levy) could adversely impact industries that are also facing regulatory, investment and external challenges. Proposals such as this and removal of para-tariffs, reforming existing laws/acts and VAT exemptions (such as in the sale of condominium housing units) will require further clarification and input from the private sector before implementation.
The Ceylon Chamber also recommends the Government progress their renewed commitment in State Owned Enterprise (SOE) reforms and Capital Market development through divestment in holdings of non-strategic enterprises, with a credible plan of action. Initiatives in shifting towards electric vehicles must be supported by a long-term energy plan that will complement the end objective of using non-fossil sources.
Repositioning the purpose
of National Budgets
The National Budget should not be viewed as an all-encompassing policy document of the Government. Instead, National Budgets should focus on actionable outcomes within the relatively short time period of a year while facilitating the long-term vision. Further, National Budgets should shift from imposing overnight tax changes, that have proved to be disruptive to businesses in the past, and instead aim to provide grace periods for the implementation of medium to long-term tax plans. The 2018 Budget provides a good foundation for budgets to be viewed in this light.
- Independent Trajectory for India-Israel Ties
- Saudi Arabia’s heir apparent Crown Prince bin Salman and stake to greatness
- Interpreting Germany’s New Grand Coalition Deal: A First Assessment
- India’s IT Minister in SL
- PCoI bond scam report Over 60 MPs could be exposed – SLFP
- Off duty soldier tracks hit-and-run driver Police send letter of appreciation to Army HQ
- Mohammad Shiyam murder case appeal Vass denies threatening CID Director
- 5th Indo-SL Defence Dialogue concludes in Delhi
- Further evidence on Gammanpila- Shaddock case on 26th
- Impressed with Kite Festival Minister promises new fishing harbour for VVT
- Muslim women should enter politics – Dr. Uthumalebbe
- SEUSL VC urges undergrads to focus on education
- LG elections Vote-buying could lead to removal CaFFE warns candidates
- Motorcyclists Association complains to CJ Accuses Mathugama Chief Magistrate of bias
- Singapore PM & Indonesian President due next week
- Justice Surasena appointed President of CoA L.T.B. Dehideniya elevated to SC
- Fmr NFF Member Premalal Fonseka joins MS/SLFP Maheepala Herath supports ‘Pohottuwa’
- Namal’s money laundering case postponed to 6 Feb
- Kuruwita prisoner alleged torture case Complaint to be handed over to UN
- Asia’s largest haul of cocaine destroyed President Sirisena oversees process
- Missing women & PTA detainees Sasitharan urges families to register
- SLMC rally attacked in Palamunai Hakeem blames Bathiudeen’s ACMC
- Tissa gang-rape victim dies Suspects could be tried for murder
- President’s confidants named in PRECIFAC report JVP
- Supreme Court decides President’s term is five years Presidential Election Next Year President’s term ends in December 2019
- Selection of volleyball coaches Law violators to attend Interview?
- ‘Singer Cup’ Under-19 Schools Cricket Munasinghe scores century
- Tamim steers Bangladesh
- Louis denies creating a stir at meeting
- Jasprit Bumrah wickets follow Kohli century for India
- Houston Marathon in freezing weather Hiruni shatters SL record Qualifies for Commonwealth Games 2018
- “Nidahas Trophy 2018” SLC formally invites Bangladesh
- 12th ICC Under-19 Cricket World Cup Bangladesh record second win
- Sri Lanka Rugby Referees Association Jamaldeen unanimously re-elected President
- ‘Singer Cup’ Under-13 Division II Schools Cricket Mahanama, Henegama and Galahitiyawa advance
- Liverpool stun City
- Peterhansel rebounds as Sainz keeps Dakar lead
- Venus and Stephens crash out of Australian Open
- Suarez fires Barcelona nine clear
- I’m too old to be favourite - Federer
- Tri Nation series begins today Bangladesh, Sri Lanka, Zimbabwe seek to rebuild
- 12th ICC Under-19 Cricket World Cup Sri Lanka triumph by 7 wickets
- Premier League Tier A Milantha scores twin centuries Chilaw Marians register fourth win
- 700 wickets and 7000 runs Dilruwan reaches milestone in first class cricket
- Hathurusinghe savours new challenge
- Sri Lanka worst in Moody’s Asia Pacific ratings
- SL at 66th in WEF’s Manufacturing Index
- Kerawalapitiya-II gets greenlight
- Plans for multi-country trade hub in Sri lanka
- CEB picks swiss firm for vehicle charging network in Sri Lanka
- A tribute to a gentleman par excellence
- Brent crude oil rises to $70 on output cuts
- Airbus says A380 superjumbo production could end
- Asian shares gain as the dollar continues to struggle
- Slowdown in international trade and its impact on globalization
- Ford plans US$ 11 billion investment 40 electrified vehicles by 2022
- Sampath Bank engages with SMEs
- LB Finance crowned No 1 Finance and Leasing Brand in SL
- Hyundai Motor and Grab sign strategic partnership
- Mastercard holds Digital and Innovation Workshop in SL
- Zuckerberg aims to save Facebook from itself
- Is economic struggle driving North Korea to the negotiating table?
- Altair sponsors 146th AGM of Colombo Club
- From challenges to opportunities: The success of DSI Samson Group
- BMICH staff presents Carols
- The March of Folly Dr. Ranjith Atapattu, an exemplary figure
- Liberia’s development at risk
- Politicos’ image plummets to lowest ebb
- UN Agency says Losing US funds could be ‘catastrophic’ for Palestinians
- Central Bank Bond issue Opportunity to reveal true culprits lost
- ‘We don’t want to fool the Sinhalese and get our dues’
- Rohingya insurgents say 10 found in Myanmar grave ‘innocent civilians’
- Thalaivar’s New Avatar
- TNA: How better is ‘better’?
- Wi-Fi but no water: Can smart tech help a city's poor?
- No political solution for Tamil grievances in sight – Ananthy Sasitharan
- Division in SLFP main reason for UNP victory
- We don’t endorse Basil’s leadership
- Rogues in all Govts should be punished- Akila Viraj Kariyawasam
- EPRLF trying to create confusion – Thurairasasingham
- National Prosperity Turning the Tide
- Disposable coffee cups:British lawmakers call for “latte levy”
- If only we could crackdown on the root causes to effect sustainable solutions Herein lies a Nation’s progress
- Planetary combines that foreshadow misfortune for father
- Pirith chants for abundant harvest
- Venus into Capricorn
- Vastu and Domestic Animals
- Yoga for Children and Adults with Disabilities
- Notes on history: The thinkers and the doers
- Reflections on a nation of non-readers
- The Disaster Artist: The (un)making of a movie
- Our children and our cinema
- INTERPRETING ASIAN CINEMA: CHALLENGES AHEAD
- How Sanskrit journalism is slowly hogging headlines
- ice manufacturing in South Asia
- CMSC’s season finale concert
- Kite Surfing Lanka Kalpitiya An experience of a lifetime
- Ella and mini Adam’s Peak
- A cave of history -Ravana Cave
- Trump’s ‘madman’ ACT scared N. Korea to talks
- Calls for ‘revenge’ Israeli settler killed in attack
- Banning of Colombo Journal First English Newspaper
- Sri Lankan author publishes for the world
- Broadway brought to our own shores
- Celebrating the harvest