National Chamber welcomes Interim Budget but flags off concerns
Thursday, 5 February 2015 00:00
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The National Chamber of Commerce (NCCSL) has welcomed concessions offered to citizens in the Interim Budget, while also raising a few concerns.
It said concessions in the form of reduction of special commodity levies, reduction and removal of certain custom duties on essential food items, reduction of petrol, diesel, kerosene and LP gas prices, reduction of retail prices of milk powder, and bread, etc., would enhance the quality of life of the citizens across the board. Further, increase of PAYE threshold, increase of salaries of the State sector employees and pensions also will increase the purchasing power of the people.
“We are of the view that measures taken to enhance the quality of the life of the people will induce a somewhat subdued consumption pattern of the people. However, we raise a word of caution similar to previous Budget concluded last October 2014 as well, with regard to inflationary trends that can emerge if uninterrupted flow of imports coming down to the economy with improvement of disposable income of the people through reduction of prices and increase of salaries. Further, careful management of currency stability at this juncture also is of paramount importance, in our view,” NCCSL said.
“It is our observation that various one off levies such as a 25% one-off tax on profits from companies and individuals who have earned profits over Rs. 2,000 million in the tax year 2013/14, special levy of Rs. 1,000 million on casinos, Rs. 1,000 million levy on satellite operators and levy of Rs. 250 million on licensed mobile operators, etc., immensely supported to maintain the budget deficit at the expected 4.4% level of the GDP. We would like to raise our concerns regarding the sustainability of the Government revenue streams in the future in the absence of the one-off levies mentioned,” NCCSL said.
It also said that income tax concessions offered for the profits from projects through investments in lagging regions, vegetable and food processing industry and proposal to introduce new export processing zones under BOI, etc., would also have a positive impact on the economy.
“We also welcome the introduction of the minimum purchase price of paddy, potatoes, tea leaves, rubber and fresh milk which extends a helping hand to SME sector. Further, triple tax deduction on expenses on skills development and training introduced to persons registered with the Tertiary Vocational Education Commission also is a positive move and broadly in line with our previous budget proposal of requirement to develop skilled labour of the country,” NCCSL said in a statement.
“We further would like to stress the fact that the Government should take the opportunity to outline the broad policy framework at this juncture where there is consensus among major political parties on various policy matters. We hope such consensus on broad policy matters would strengthen the consistent policy framework and investor confidence at this crucial juncture where the country is in dire need of FDIs,” NCCSL said.
