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Friday, 28 October 2016 00:10 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
Finance Minister Ravi Karunanayake yesterday took the business community to task, warning the private sector of a wakeup call in the Budget 2017. However, he assured they would be supported as much as possible by consistent policies with proposals that would improve the business environment and foster growth. Speaking at a CEO’s Breakfast Meeting organised by the Sri Lanka-Philippines Business Council, the Finance Minister urged the private sector to be proactive in investing and expanding their businesses.
“Please get moving. We will ensure that the environment is created. We want to monetise certain assets which have been creating debt and build more public-private partnerships (PPPs) via debt equity swaps and investor participation,” he said.
Assuring that the Government’s fiscal consolidation plans would continue consistently, Karunanayake emphasised that increasing revenue and fiscal space was essential with Government income targeted to reach 16% of GDP from the present 10.4%. The Finance Minister urged the business community to pay their share of taxes, which is helpful to increase revenue and capital investment.
“Inconsistency is in the voters. If we had this system going from 1977 to 1994 we would have been beyond Singapore today. If you want consistency keep voting for us!” he quipped.
Referring to the VAT hike which was approved by Parliament on Wednesday after months of delay, he said that due to the good governance policy the Government had lost Rs. 80 b revenue from long drawn out measures including a suspension by the Supreme Court in July.
However, the Minister pointed out that as a result of the financial discipline that was brought into the system revenue from institutions such as Customs and Excise Department public, revenue had increased considerably. Over the next year, the Government hopes to raise Rs.10 b from the 15% VAT implementation process with projected revenue for the rest of the year being Rs. 1.8b. The Government is also hoping to achieve an ambitious deficit of 4.7% for 2017 and push the economy into a more sustained path of growth based on investment and exports.
“When we took over the office we collected only Rs. 40 b a year as excise duty and now we are collecting Rs. 160 b. Customs revenues have grown by over 70%,”he pointed out insisting that Government plans to streamline key institutions and introduce online payment platforms would increase ease of doing business while raising public revenue.
Business tycoon Harry Jayawardena yesterday lashed out at the Government for not having a consistent policy framework for the private sector, pointing out that it not only affects companies but also showcases bad planning by the Government.
He called on the Government to create a level playing field saying, “This Government comes and gives one policy and the other Government comes in and gives another, leaving the private sector in misery. We don’t know which way to go.”
Speaking at the CEO’s Breakfast Meeting organised by the Sri Lanka Philippines Business Council, Jayawardena pointed out that although Governments and politicians change over time, the policies and systems should not change.
“Fair play has to be established. These crooks and the ‘comis kaaka’s’ of that Government come and join this Government, and the same old systems are being carried on by another Government. This carnival has to be stopped and this is the problem we face as the private sector,” he stressed.
Power crisis, the tea industry and trade policy were highlighted as examples of inconsistent policy tangles. “When I said inconsistency, look at the power sector. Why are we in this mess today? One Government plans power plants and the next Government cancels them. Look at trade policy. We have around 15,000 to 20,000 items with Pakistan and India. But how much trade is taking place? Who’s looking at these bottlenecks? Look at the tea market. How are you going to pay for labourers without having an income? Why are trade agreements not implemented? Why are they stuck? This is why I said we must have a coherent trade policy.”
Noting that the private sector is performing a magnificent task in driving the economy even today, he claimed that there is a need for “landlords in the systems” to take responsibility and be accountable for decisions.
“How many banks have gone and funded bad private investments because of political interference? They don’t care for the bank or for the investors. This is why we need landlords for the system to work,” he said.
While commending the Finance Minister for his efforts in dismantling all the errors that had been in the system during the past, he however said that there are still some loopholes that the Government should improve in some of the revenue collecting measures in Budget 2017.
“You said you consider everyone’s opinion’s for the Budget. If you did so, look at the taxes you have collected from alcohol. It can be further improved. There are good things, but the money is not collected. Under-invoicing at customs still happens,” he noted.
