Chamber of Construction Industry President Surath Wickramasinghe said the Budget is a progressive one with challenges to the Construction Industry, focusing on public investment in the development of transport, infrastructure, construction of irrigation systems.
The budget also provides Rs. 413 billion for the construction of roads, electricity, water, irrigation and other infrastructure development.
“The tourism and the construction sector have benefited hugely since concessionary duty on goods and raw materials have been granted,” he added.
He listed some of the key highlights for the construction sector via Budget 2011.
The Budget at a glance :-
We are pleased that some of the bottle necks faced by the Construction Industry in implementing projects have been addressed in the Budget specially the Ministerial Committee to “fast track” project approvals within a period of 6 months.
Since there are several taxes levied by the government agencies on developers/investors, the Budget proposed a single payment or something similar for processing of plans, etc. which is most welcome.
We are also pleased that the Budget provides for Training of Skills for Construction as well as for Research and Development to bring down the cost of construction and it being treated as an allowable expenditure for Income Tax purposes.
The VAT and Duty concessions for import of Construction Machinery reduced from 15%-13% is timely.
The reduction of Corporate Taxation for Construction Companies from 15%-12% is heartening.
The need for Foreign Consultants and Contractors to collaborate with the local counterpart in all Construction Projects is a long felt requirement.
The proposal to develop of One Million Housing Units nationally over the next 6 years and the rehabilitation of further 80,000, and 70,000 housing units for shanty dwellers in urban areas is a massive challenge. To achieve this target, the private sector will need to be mobilised with adequate incentives to participate in this venture.
The Construction Industry Sub-contractors have been exempted from the Nation Building Tax which is good.
Streamlining the structure enhancing the tax free allowance up to Rs. 600,000 will benefit the professionals.
We are pleased that Rs. I billion has been provided to attend to the neglected public assets that are incomplete construction related projects.
However, we are not yet clear regarding the setting up of an Infrastructure Fund or something similar which our Chamber continuously canvassed for to be included in the Budget for private sector involvement in Infrastructure Project.