COLOMBO: Ceylon Chamber of Commerce, Sri Lanka’s largest business chamber has welcomed a budget for 2018, but asked the government to end the practice of overnight tax changes.
“While we see many proposals complimenting the medium-term vision of the government beyond 2018, it is important that the government does not waver in the near-term from the current fiscal consolidation path,” the chamber said. “While there is less ambiguity in a majority of the proposals, certain measures could have a negative impact on industry if implemented as mentioned in the 2018 Budget.”
The chamber had broadly backed increases in valued added taxes and a revamped income tax law, which was discussed with tax payers. Sri Lanka’s rulers tend to change taxes suddenly with no prior warning, which analysts have pointed out, tends to undermine rule of law.
“National Budgets should shift from imposing overnight tax changes that have proved in the past to be of a disruptive nature for businesses and instead, aim to provide grace periods for implementation of medium to long-term tax plans,” the chamber said.
However the budget also proposed a levy on bank cash transactions and levy on cellular towers, which were secretly hatched. The chamber said the two taxes were proposed on firms which were already tightly regulated and were facing investment and external challenges.
Banks need to boost capital and telecom firms were facing voice revenue losses from Viber-style services, analysts say. The proposed 2018 National Budget progresses the recent economic policy visions of the government. There is a distinct move in the 2018 Budget towards putting into action strategies outlined in Vision 2025 and the Prime Minister’s economic policy statement of October 2017. This is particularly the case with initiatives such as boosting trade and investment, improving housing ownership and the development of SMEs. The Ceylon Chamber of Commerce welcomes the proposals to drive Sri Lanka to becoming a more environmental-friendly economy with an emphasis on improving access to finance for the development of enterprises, SMEs and start-ups.
