Construction Industry Chamber has its say on Interim Budget
Friday, 30 January 2015 00:41
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Chamber of Construction Industry President Dr. Surath Wickramasinghe yesterday issued the following statement on the new Government’s Interim Budget.
The construction industry will be marginally affected by the Budget. The Interim Budget up to the 100-day period has concentrated more on the immediate benefits of the public at large to meet their essential needs, we commend this approach.
The construction industry is pleased that the cost of cement prices has been reduced by Rs. 99, which will help to lower the Cost of Construction. The incentives to be offered for using of Solar Power are also welcome.
The Interim Budget should have included some incentives particularly for the Construction of Rural and Urban Housing by reducing the tax on some of the other essential imported materials such as glass and timber. Alternatively, offered tax incentives for import substitution for the fabrication of building components such as purlins, doors and windows, roofing sheets and aluminium products to make the cost of construction more affordable to the lower and middle income groups.
However, introducing a mansion tax of Rs. 1 million per annum for houses estimated to cost Rs. 100 million or exceeding 5000 sq ft will be unrealistic. The Rs. 100 million could even be spent when you build a house with luxury finishes, which may be under 3000 sq ft. Alternatively, some may design two units and connect it later and get over the 5000 sq ft area rule. In any case, only a limited number of people can afford to build 5000 sq ft houses today?
Will this same tax be applicable for luxury apartments of 5000 sq ft? If so it will be counterproductive as the developers will not be interested to cater to high-end foreign investors. This should be reconsidered.
