National Chamber welcomes 2014 Budget overall but frowns on few inconsistencies

Saturday, 23 November 2013 08:59 - - {{hitsCtrl.values.hits}}

By Shabiya Ali Ahlam The National Chamber of Commerce (NCC) yesterday welcomed the majority of the 2014 Budget components, but frowned upon a few inconsistencies observed in areas related to revenue proposals. NCC Senior Deputy President Thilak Godamanna, speaking on behalf of the institution at a press conference held in Colombo to put forward its views in this regard, said the Budget proposal presented by the Government on Thursday (21) is well received by the chamber as it is noted to be consistent with the overall macroeconomic policy framework and the economic thrust sectors that have been pursued during the last five years.

Also present at the event were NCC Secretary General/CEO E.M. Wijetilleke, NCC Deputy President Sujeeve Samaraweera, NCC Chairman Budget Committee H.A. Ariyaratne, NCC Treasurer H.A. Wehalle, NCC Secretary Asela De Livera, NCC Chairman Agriculture and Food Processors Committee Sarath Chandra De Silva and NCC Chairman Banking and Financial Services Committee Nandika Buddipala. Noted to be most welcoming in the Budget is the Government’s initiative to accelerate the irrigation systems upgrade and incentives to the overall agriculture sector covering small holdings as well as large plantations companies. The chamber acknowledged it is this sector that contributes positively to GDP growth and the development of rural and regional areas. “It is encouraging to note that the Government is consciously promoting applied research by universities and research institutions in association with the private sector,” said Godamanna. The NCC having had many discussions with the Consumer Affairs Authority and relevant ministries requested the removal of price controls on poultry and the chamber commended the Government for replacing poultry price controls with a price formula based on cost structure. This requested was put forward since the price controls, along with the ever-increasing utility and poultry food prices, were observed to have put the poultry farmers in serious difficulties. Continuing to support SMEs and micro sectors, the NCC said it was also pleased to note the Government’s initiative to assist the promotion of rural women entrepreneurship as well as self employment. Furthermore, it said that the Government’s intention to simplify and streamline public sector procedures, along with incentivising the public sector employees, would be beneficial to both the public at-large and the business sector to obtain services more speedily and effectively. However, although the macro policy framework shows consistency, the NCC asserted there are inconsistencies in the Budget with regard to specific revenue proposals. Pointing out a few, it said the threshold limits of VAT for supermarkets have been brought down from Rs. 500 million to Rs. 250 million within a period of one year. While the corporate tax rate for SMEs have been increased from 10% to 12% within a period of one year, the additional tax on banks has also been imposed again, partially nullifying the positive effect brought about by tax reduction three years ago. “As a chamber we have been requesting the Government in the past to pursue consistent policies that would affect the private sector. For the Government to achieve its budget deficit target, it would be extremely necessary to reduce the financial losses of Government owned enterprises,” stressed Godamanna. He added that the chamber would have been “happy” to see in the 2014 Budget some specific measures that would make State-Owned Enterprises more efficient and their management accountable.