Mixed reaction for Budget 2017
While the Government’s 2015 budget offers wide ranging concessions to the private sector with the aim of luring more investments and through partnerships between the private and the public sector, there was confusion in many sectors.
“We need clarity as some of the proposals are unclear,” one business leader said.
On Friday, the Colombo bourse expressed disappointment in the proposals with the All Share Price Index falling by 0.08 per cent or 5.19 points to 6,415.59 and the S&P SL20 sliding by 0.10 per cent or 3.68 points to 3,589.97.
Ravi Abeysuriya, President, Colombo Stock Brokers Association, said there was confusion in most quarters in the market and clarity was needed on some of the proposals.
For example on the proposal where “… present tax exemptions on certain dividends, and interest or profits from investment on listed securities (corporate debt securities, etc) and other instruments will be removed” it is unclear whether removing of exemption will apply for investment in equities (i.e. listed shares) and listed unit trust for corporates as well, he said.
It is also unclear whether profits means capital gains made from sales of securities among other issues, he added
A Business Times (BT) poll (turn to Page 4 for a full report on the budget) revealed mixed views on the budget but a large majority said that the 2017 budget was an improvement on the 2016 budget.
Another proposal that drew uncertainty was plans to reduce the plantation acreage managed by Regional Plantation Companies by 25 per cent .
Apart from the plethora of tax proposals and positive-looking plans to upgrade education and technology, another area which the private sector sought clarification was Finance Minister Ravi Karunanayake’s call to 100 of Sri Lanka’s largest companies to join hands in national development in PPPs (public private partnerships).
While it is learnt that the minister has discussed these issues with key stakeholders, the business leader said that the proposal implies the private sector joining the government in mega projects instead of offering these to foreign investors.
Meanwhile in the 2017 budget, 151 expenditure proposals amounting to Rs.140 billion were made with the government expecting to collect Rs.139.9 billion from 16 revenue proposals.
In the 2016 budget, there were 114 expenditure proposals and 21 revenue proposals to raise Rs.223 billion, sharply higher than 2017 revenue proposals. However in 2016, around 21 expenditure proposals were not implemented and some have been repeated in the 2017 budget as well.