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Sri Lanka’s CCC hails government’s business friendly and production oriented budget for 2021

Sri Lanka’s CCC hails government’s business friendly and production oriented budget for 2021

The Ceylon Chamber of Commerce (CCC), one of the pioneer business chambers in Sri Lanka, has reportedly stated that it welcomed the proposals put forward by Sri Lanka’s Prime Minister Mahinda Rajapaksa in the National Budget for 2021 and has termed it as a business friendly and production-oriented. 
“The Budget has focused on boosting economic growth by enhancing exports, providing investment relief for key thrust sectors supplemented by public investment proposals, promoting capital markets and supporting the growth of startups and SMEs,” the CCC has said in a statement. 
The emphasis on tax policy continuity and measures announced to strengthen tax administration demonstrates a strong commitment to policy consistency while strengthening and broad basing revenues, the report stated. 
The CCC had also in its pre-Budget proposals highlighted the importance of the Sri Lankan government maintaining the current tax laws and rates at least for the next five years or so thereby providing the necessary consistency in tax policy. The adoption of a consistent tax policy under the National Budget for 2021 would not only provide a platform for proper planning for business but would also help the government in long-term cash flow planning and strengthening fiscal consolidation, the report has noted.
The CCC has also welcomed the tax relief for investment in machinery and equipment for domestic manufacturing and exports and the relaxing of import restrictions on certain sectors in line with past recommendations by the Chamber. 
Proposals on enhancing digital governance, investments in technology and infrastructure including rural connectivity to facilitate digital inclusion are also notable.
“We trust the commendable proposals in the Budget will see timely implementation and will continue to involve private sector consultation.” 
The Chamber has further stated that it looked forward to the facilitation of further stakeholder engagement with respect to holistic labour reform and the placement of the proposals related to the extension of the retirement age and the contribution of 0.25% on turnover towards an insurance fund, within the context of the said broader reform agenda.  
As for wage reform, the CCC has recommended the placing of continued reliance on the time-tested mechanism of collective bargaining which has so far been adopted consistently across industry sectors and encompasses factors related to productivity and worker welfare, and as such that the Government reconsiders the budget based wage intervention for the plantation sector. 
The Chamber has said it trusted that the positive benefits accrued from the macro stability set out by National Budget for 2021 would provide a foundation for sustainable growth acceleration over the medium and long-term as envisaged. 
The Chamber has also expressed that the government would pivot on the growth foundation established, to continue its progress in reforms on several key agendas including but not limited to those related to Local and Foreign Investment, Debt Management, Export Promotion, State-Owned Enterprises (SOEs), Capital Market and productivity enhancements in the public sector. 
“The Chamber will continue to support the Government’s initiative to effectively execute a public-private shared vision for accelerated economic revival and social sustenance,” the CCC statement has added.  

OSL take:

Sri Lanka’s budget 2021 focuses on taking the country’s economy on a new path to keep it on par with the global economic trends. The government of Sri Lanka has given much attention to develop technology and an economy based on it. Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have made it a business hub in the South Asian region. Sri Lanka’s economy is already showing signs of returning to normalcy despite the internal and external challenges posed by the global Covid 19 pandemic. Foreign businesses/investors could therefore explore business opportunities in Sri Lanka. 

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Article Code : VBS/AT/24112020/Z_2

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