Treasury Secretary rules out re-applying for GSP +
View(s):Sri Lanka’s Treasury Secretary asserted this week that the Government won’t re-apply for GSP Plus concessions and will not ask for this benefit, saying “we should not grow markets on the basis of subsidies”.
Citing new post-war challenges like wage rate hikes, worker unrest and even lack of workers, Treasury Secretary Dr. P.B. Jayasundara said subsidies makes the country vulnerable.
He was addressing a forum on ‘Government Strategy for Industrial Development of Sri Lanka’ on Tuesday at the Ministry of Industry and Commerce in the presence of 95 leading exporters, businessmen and industrialists.
The meeting was chaired by Rishad Bathiudeen, Minister of Industry and Commerce and included Anura Siriwardena, Secretary, Ministry of Industry and Commerce.
In a report on the meeting issued by the Ministry media office, the two hour long, in-depth forum, successfully resolved several sector specific issues raised by various industry sectoral representatives present at the session. On taxes, Dr. Jayasundara was quoted as saying that the President has taken a policy decision to rationalise tax.
“On the other hand, I ask exporters-if you can’t pay 12 per cent export tax, then why export? Our taxes for SMEs are 12 per cent, so is for the tourism sector, at 12 per cent. You need to get your (export) products in good shape and make Sri Lanka the wonder of Asia,” he said. On recent price hikes, he said the government is criticised by many people on recent policy decisions but painful decisions were taken to manage to keep the balance in the economic system.
“Our economy is strong. We can raise (money) by a phone call. The Bank of Ceylon raised $ 500 million at short notice. And the Central Bank has done a first class job with the Rupee. For the fourth consecutive year, we have a declining budget deficit, last being 5.8 per cent. The long term signal of this trend is that more ‘good money’ will come to you. And I am very optimistic about how Sri Lanka’s environment will turn out. But I am not sympathetic on a change in rates of taxable computed profits. Taxes should be paid. Please help us to protect this tax regime since the government needs money to provide facilities. Countries will prosper, if tax rates prosper, and countries will slide, if taxes fall,” he was quoted as saying in the Ministry statement.
He called for the establishment of a Sri Lanka brand identity because there are only a few products coming from Sri Lanka.
When industrialists raised the issue of brain drain, Dr. Jayasundara said: “Unless you overcome your productivity, you have a problem in overcoming these new challenges. Industrialists must objectively debate as to how labour markets work. We cannot stop brain drain simply because it is an individual freedom of choice. I blame our chambers for this. They need to educate the industries but this is not happening. I am sympathetic to consider royalty payments on brand promotions. I shall recommend this to the President so that it is proposed in the next budget. Also take a long term view on products you select to manufacture, rather than a stop and go method, which will lead our country to become an assembly plant!”
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