A new report from IFC and World Bank finds that the reforms implemented by Sri Lanka has helped create a much better business environment for entrepreneurs.
Sri Lanka rose to 89th position in global ranking, of 183 countries, partly by strengthening investor protections and reducing taxes on business, according to an IFC press release. “Sri Lanka made paying taxes less costly for businesses by abolishing the turnover tax and social security contribution and by reducing corporate income tax, value added tax and nation building tax rates,” it said.
However, despite the significant improvements seen in Sri Lanka’s business landscape, the report has also identified further areas requiring intervention in the future, as the country has seen less progress in paying taxes, registering property and enforcing contracts. Sri Lanka continues to rank poorly on paying taxes (rank 173) as well as registering property (rank 161) and enforcing contracts (rank 136) Sri Lanka also strengthened investor protection by requiring greater corporate disclosure on transactions between interested parties.
Released this week, Doing Business 2012: Doing Business in a More Transparent World assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. This year, the ease of doing business ranking has expanded to include indicators on getting electricity.
Over the past six years, all eight economies in South Asia have made their regulatory environment more business-friendly. “Entrepreneurs in developing economies have a vital role in creating economic opportunities,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group in the statement. “South Asia’s governments have empowered entrepreneurs by implementing regulations that are efficient, accessible, and sustainable, and they should continue to seek avenues for improvement.”
Among the region’s economies, the low- and lower-middle-income economies of Afghanistan, Bhutan, India, and Nepal also improved business regulations for local firms. Bhutan, rising four places to 142, recently launched a public credit registry and streamlined business start-up while Afghanistan, ranked 160, made it easier for local businesses to get an electrical connection.
New data show that improving access to information on business regulations can aid entrepreneurs. In five of South Asia’s economies, traders have access to relevant documentation requirements online or through public notices. Meanwhile, fee schedules for electricity connections are easily accessible in three economies.