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of peace revives economy January 13 - With a ceasefire in place and the economic embargo on the Wanni lifted prospects for business in the north improve. January 18 - United National Front (UNF) government decides to simplify the country’s tax structure in the budget by doing away with overlapping taxes and reduce taxes as an incentive to industrial and commercial growth. February 24 – Government warns of increases in power cuts already in force if normal monsoon in March does not materialise. March 3 - Annual inflation, based on the 12-month moving average, fell to 12.8 percent in February from 13.5 percent in January. March 10 - Extension of power cuts badly affect manufacturing industries resulting in mounting costs, disrupted production cycles and an inability to meet orders on schedule. The worst affected are small industries and energy-intensive industries such as glass, cement and ceramics. March 24 - The private sector and the markets welcome the government’s maiden budget as being conducive to the revival of the economy. The budget announced the abolishment of the Goods and Services Tax and the National Security Levy which will be replaced by a Value Added Tax system that would be more equitable and increase government revenue. Decrease in corporate taxes, halving the surcharge on customs duty and opening up of certain restricted sectors of the economy to foreign investors were some of the features of the maiden budget. April 14 - Public Enterprise Reform Commission (PERC) plans to list a small stake in Sri Lanka Telecom, seeking a local IPO (initial public offer) of about 10-15 percent stake in SLT to increase private sector participation. - The UNF government aims to reduce poverty by raising $300 - $800 million from the IMF, World Bank and other donors under the poverty reduction and growth strategy (PRGS). May 5 - Appointment of W.A Wijewardene as Deputy Governor of the Central Bank was quashed in a landmark decision by the Supreme Court after a former officer said he was bypassed for the job though he was more senior. May 12 - Tax on deposits which earn interest of Rs. 72,000 and over per annum deals a severe blow to the lower middle-class whose only avenue of investments of savings and provident fund is in fixed deposits. May
19 - ‘MICRO’ the first-ever national car emerges,
marking a turning point in automobile manufacturing in the country.
May 26 - The World Bank looks to giving a massive rehabilitation
and reconstruction package if peace talks succeed. July 14 - In one of the biggest divestitures of state assets in recent years the government plans to sell a 15 percent stake in Sri Lanka Telecom. July 21 - Despite pleas by the business community to reduce holidays in an effort to increase productivity the government decides to maintain the same number of holidays next year. Indian Oil Corporation plans to transform petroleum product retailing in the island by expanding the use of retail outlets with facilities such as convenience stores and automatic teller machines. July 28 - Production of Ceylon tea is forecast to exceed the 300 million kgs mark this year. August 11 - Tourist arrivals from Malaysia and India doubled in the first half of the year to 5,022 from 2,410. September 1 - John Keells Holdings deputy chairman Jagath Fernando retires early after a 30-year spell with the conglomerate. September 15 - The ICC champions’ trophy gives a massive boost to tourism while bringing other spin-off benefits to the economy. September 22 - The Colombo Stock Exchange registers its highest turnover for the year as the All Share Price Index crossed the 800-mark after five years. The foreign exchange situation looks gloomy with the trade deficit rising to $977 million in the first seven months of the year. Given the dependence of the economy on foreign trade and other external transactions, persistent foreign exchange imbalances have adverse consequences on overall economic performance. October
6 - The government plans to lease the last of the state-owned
private estates with the help of the Board of Investment and hopes
to raise Rs.250 million. - Securities and Exchange Commission, the financial markets watchdog, revealed to have launched an investigation into share transactions of CSE chairman Ajit Gunawardene. - New entrant
into the gas market ‘Mundo’ offers gas at Rs. 100 less
than competition leading to speculation as to whether this is just
a false promise. - Bankers expressed disappointment at the imposition of the VAT on the banking sector November 17 - The VAT on all wholesale and retail sectors from July 2003 is forecast to result in an increase in prices of all goods, excluding essential items and pharmaceuticals. - Michael Mack, the chairman of the Securities and Exchange Commission takes leave after mounting criticism following the news of a probe by SEC investigators into alleged insider dealings by him involving sale of Aitken Spence shares. November 24 - With the re-opening of the A-9 highway soft drinks firms battle for share of market in Jaffna. December 1 - The Peiris family loses control of Richard Peiris and Company following a ruling by the Securities and Exchange Commission and a Supreme Court order. December
8 - Sri Lanka Telecom concludes IPO selling off a 12 percent
stake in the company. December 15 - Corporate leaders give mixed reactions to the effect of the peace process, with representatives of major businesses commending the government while those of the small and medium sectors expressed scepticism. December 19 – Central Bank announces that Pramuka bank is to be liquidated after its investigation reveals serious financial irregularities. Former Pramuka chairman Rohan Perera is said to have fled abroad. December 20 – SEC insider dealing probe takes new turn with the two-man independent panel of experts asked to review Attorney General’s advice of a prima facie case against Mack and two other ex-directors of Aitken Spence, reportedly clearing them of any wrongdoing. |
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