- Top biz leaders praise policy consistency and limited new taxes
- But calls for strong implementation, close eye on deficit and revenue targets
- Want clarification on GST, 0.25% levy for insurance fund, retirement age flexibility
Top business leaders yesterday welcomed Budget 2021 and commended the Government for employing a light touch with taxes while encouraging investment in several key sectors but also called for strong implementation and more policies to underpin the proposals.
Speaking at the Daily FT-Colombo University MBA Alumni Association organised Budget 2021 Forum, Hayleys PLC Co-Chairman Dhammika Perera, John Keells Holdings PLC (JKH) Chairman Krishan Balendra, Access Engineering PLC Chairman Sumal Perera, Hemas Holdings PLC Group CEO Kasturi Wilson, Expolanka Holdings PLC Group CEO Hanif Yusoof, Standard Chartered Bank Sri Lanka CEO Bingumal Thewarathanthri, 99X Technology CEO Mano Sekaram, PricewaterhouseCoopers (PwC) Director Charmaine Tillekeratne and SC Securities Ltd. Head of Research Charitha Gunasekere were all broadly supportive of the Budget.
They nonetheless acknowledged that the Government has a challenging road ahead to ensure implementation of all the proposals and also advocated for more engagement on a handful of proposals including the mandated plantation wage, change in retirement age and 0.25% insurance levy on turnover of companies in some sectors. Complete details of their views will be published in the Daily FT on 23 November.
“The biggest highlight is tax rates will be kept for five years and the thrust for exports is welcome. We have had many decades of trade deficits and if you look at successful Asian economies they were all driven by exports and support for them is positive. Working on stronger trade relationships is also good.
“Incentives for developing capital markets is positive as one of the biggest issues was liquidity and the smallness of the market and encouraging more companies in the stock market will help resolve these challenges. I hope more companies will list and I also urge the Government to list some State Owned Enterprise (SOEs), not fully but at least 10%-20%. Overall I want to complement the Government on a business friendly Budget,” JKH Chairman Balendra said.
His views were echoed by the other panellists. PwC Director Charmaine Tillekeratne pointed out that the Government will have to improve tax collection and broaden the tax base to meet the ambitious revenue target and strictly monitor public finance to ensure the deficit remains contained and debt sustainability maintained.
She also called for more clarity on how the Goods and Services Tax will be implemented recalling that while a consolidated tax was a good move there have been instances in the past where the Government has introduced one composite tax only to bring back the separate taxes on top of the consolidated tax later.