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Sunday, 27 November 2011

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Budget 2012 Development-friendly – Business Chambers

The business chambers hailed the 2012 Budget as a development - friendly budget focused on sustaining economic growth and enhancing benefits for small and medium sector enterprises which are the backbone of the country’s economy.

The Ceylon Chamber of Commerce (CCC) in a statement said the 2012 Budget maintains the consistent fiscal framework announced two years ago since the end of terrorism in 2009. The fiscal deficit has been reduced to 6.2 percent of the GDP in line with the medium-term projections. The budget aims at sustaining the eight percent economic growth rate next year as well.

“The CCC is pleased to note that tax reforms introduced in the last budget had been upheld in this budget as well with additional incentives to promote investments and a few further simplifications to the tax structure”, CCC sources said.

The Chamber considers the move to depreciate the Sri Lankan rupee as a signal to move towards a flexible and a more competitive exchange rate is being vital for the growth of exports which would bear on Sri Lanka, achieving investments and growth targets.

The National Chamber of Commerce of Sri Lanka (NCCSL) welcomes the 2012 Budget that has given priority to develop small and medium sector enterprises which accounts for over 80 percent of the export sector.

NCCSL hailed the proposals to provide tax concessions and incentives for the SME sector which makes a salient contribution to the economy.

NCCSL President Asoka Hettigoda said that the National Chamber which promotes development of SME’s welcomes the concessions to the sector.

The Chamber welcomes the depreciation of the rupee by three percent which will help exporters to be competitive in the global market. The Chamber also recognises the importance of continuing infrastructure development and incentives to develop human capital.

“Reducing the threshold to Rs. 25 million with a four-year tax holiday will encourage SMEs thereby promoting rural development”, Hettigoda said.

Federation of Chambers of Commerce of Sri Lanka (FCCSL), President Kumar Mallimarachchi said the 2012 Budget has focused on promoting the SME sector with tax concessions and credit facilities which are vital to boost the growth of the sector.

“The Chamber welcomes the move to set up state banks for SME lending in rural cities which will be a huge impetus for the small and medium sector enterprises which play a key role in rural economic development”, Mallimarachchi said.

FCCSL also welcomes the proposals to simplify the tax structure and create a more conducive environment for foreign investments vital to stimulate economic growth in the country.

“The depreciation of the rupee is a welcome move which would support the export sector but implications on balance of payment will need to be looked into” the chamber chief said.

National Chamber of Exporters Immediate Past President Rohan Fernando said that while the move to depreciate the rupee is a sound move it should have been done as a normal course of action.

He said that the Budget proposals are good but they need to filter down into action which is essential to accelerate development in the country.

“Bureaucracy must not be a stumbling block to set up new ventures and promote investments. Bureaucracy must be productivity oriented”, Fernando said.

The NCE welcomes the move to simplify the tax system and the proposal to provide a 10 percent salary increase to public servants.

The Sri Lanka Chamber of Small Industry President, Aloy Jayawardene said that the Chamber commends the move to set up state sector bank branches to facilitate credit for SME entrepreneurs.

“Banks in the regions could set up divisions to serve the SME sector instead of opening branches only for the SME sector”, he said.

The SLCSI hails the move to import machinery Duty Free to manufacture items which are imported to Sri Lanka.

Chamber of Construction Industry (CCI) CEO/ Secretary General Dakshitha Thalagodapitiya said the 2012 Budget is a development- oriented Budget which could facilitate the achievement of eight percent GDP growth in the medium-term.

He said since high priority has been given to infrastructure development the Budget offers a large number of business opportunities to the construction sector.

The Construction Chamber being the largest provider of vocational training in construction-related crafts, it is pleased to note that the Budget has focused on vocational education in the construction sector.

 

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