SL's rise in Doing Biz index is a tangible improvement, says Central Bank

Saturday, 22 October 2011 00:00 -     - {{hitsCtrl.values.hits}}

The Central Bank yesterday described Sri Lanka’s rise in the Doing Business Ranking in 2012 was a “tangible improvement as against 2011’s performance.

The Doing Business Ranking computed by the World Bank Group, Sri Lanka is ranked 89 of 183 countries in 2012.

“This is a tangible improvement compared to the ranking achieved in 2011, which was 98. The Doing Business Ranking presents quantitative indicators on business regulations and protection of property rights that can be compared across 183 economies,” Central Bank said in a statement.

A set of regulations affecting 10 stages of a business’s life were measured for the 2012 ranking: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

According to the Doing Business Report 2012, the pace of regulatory reforms has remained steady over the past year in South Asia and Sri Lanka and Bhutan were the most active in this area.

Most of the reforms undertaken in Sri Lanka in 2011 were in the areas of Protecting Investors and Paying Taxes. The ranking of Sri Lanka in the area of Protecting Investors improved dramatically from 74 to 46, an improvement of 28 places.

This was achieved by the amendment of the CSE listing rules, requiring greater corporate disclosure on transactions between interested parties.

Sri Lanka also undertook substantial tax reforms during 2011, reducing tax costs to businesses by abolishing turnover tax and reducing corporate income tax, value added tax and nations building tax rates.

However, although these reforms were highlighted in the Doing Business 2012 report, they were not taken into account in the computation of the ranking in terms of the Doing Business methodology, as a period of one year had not elapsed since the tax reforms were implemented.

Accordingly, a considerable improvement in the Doing Business ranking in 2013 could be expected when these reforms, other reforms which came into effect after June 2011 are considered and envisaged reforms are implemented, moving the ranking closer to the target ranking of 30 in 2014.