Clarifications are needed on implementation of several of the new tax measures, for instance new taxation of institutional unit trust investors, the removal of the National Tax Credit, and the move back to VAT refunds from the SVAT scheme, the Ceylon Chamber of Commerce highlighted in a statement last week. The CCC urged the Ministry of Finance to consult with relevant stakeholders fully before implementing these measures, to avoid negative fallouts.
Although Budget 2017 has signalled continuity in the economic policy priorities of the government, the CCC pointed out that certain unfriendly policies like the price controls, directing operational decisions of business and encouraging more government-linked commercial ventures will hurt domestic and foreign investor sentiments.
Bank lending to specified sectors and singling out a specific private entity to make a donation to the President’s Fund were flagged as points to be re-looked at in Budget 2017.
The CCC, however, was pleased with the proposals to strengthen education and skills, especially the proposal to enable students who do not get into state universities to study in UGC-approved private higher education institutions. “This is much needed to ensure greater inclusion in tertiary education access and build a competitive workforce,” the CCC stated.