Removal of taxes on exporters including Cess on the cards
The Government is making a renewed effort towards greater integration into regional and global supply chains, higher levels of FDI, thereby enhancing prospects for private sector investment, official sources said.
It will consider removing taxes imposed on exporters including Cess which would help to encourage more exports, a senior official of the Ministry of Policy Planning and Economic Development told the Business Times. On average, Rs. 6 per kg is charged as Cess on some export products.
Cess was introduced to formulate a fund from exporters which in turn could be used for promotions and to ‘increase value addition.’
However this money was used by the previous Government for political work and for unwanted glorification of a few individuals. It was also used to fund unsuccessful projects, he claimed.
New export and trade policies are to be introduced shortly to increase the efficiency of trade facilitation, remove barriers to foreign investment entry and establishment (including access to land), enhance access to finance, and strengthen financial market infrastructure. These steps should help attract FDI and complement public investment.
State Minister Sujeewa Senasinghe said the government will introduce a new policy on exports by December this year.
The exports share of GDP which was at 35 per cent a decade ago has dropped to 14.9 percent, he said adding that the new government would take meaningful steps to increase exports not by 20 per cent or 35 per cent but by at least 200 per cent.
To boost trade and private sector development, the government will seek to reduce costs and bolster competitiveness, he said adding that the key element in this work would be a review of Sri Lanka’s trade regime including an evaluation of para-tariffs and other non-tariff barriers that have led to a high level of effective protection and hampered exports.
The aim is to increase the efficiency of trade facilitation, remove barriers to foreign investment entry and establishment (including access to land), enhance access to finance, and strengthen financial market infrastructure.
These steps should help attract FDI and complement public investment, he pointed out.