The Exporters Association of Sri Lanka (EASL) criticized the budget proposals last week stating they were more corrective than progressive. They further lamented that these proposals do not address the needs of the export industry.
“The fact that taxes for Exporters has been increased from 12% to 14%, the withdrawal of SVAT which hugely minimized the transaction costs, will in our view, be a disincentive to increasing Export values,” the statement indicated.
Furthermore, the imposition of the Trade in Services tax of 14%, which has negated the zero tax on Entrepot Trade could have a negative impact on this activity, EASL lamented.
EASL also expressed their dismay over the increase of the CESS on rubber from Rs.4 to 15 stating it a ‘non-competitive measure’. “We would appeal that an even playing field between manufacturers and producers of rubber sheets etc. be considered,” the exporters urged.
Furthermore, the exporters in their statement highlighted that it would be prudent to withhold the suspension of SVAT until such time as RAMIS is fully operational. They also proposed that the rationale for extending incentives for branding which has selectively been extended to only tea, should be extended for other agricultural exports viz a viz spices, fruits and vegetable sector, floriculture etc.
EASL further charged that the proposed 75% rebate on tax for exporters who achieve 15% increase in foreign exchange between 2015/2016 and 2026/17 was ‘unrealistic’.
However, aspects such as improving standards of education, encouraging the growth of competitiveness of SMEs, aiming to attract FDIs and setting up a system under PPP to monitor the implementation of the budget were acknowledged by EASL as positives in Budget 2017.