Although there is much potential to improve the Sri Lankan economy, the lack of economic stability was the main hindrance to achieving growth and the Government is looking at a private sector led FDI growth model, Minister of Finance and Mass Media Mangala Samaraweera told guests at the Sri Lanka Investment and Business Conclave 2018 in Colombo last week.
This third edition of the business conclave on the theme ‘Partnering for Prosperity’ was hosted by the Ceylon Chamber of Commerce.
The government has deployed targeted interventions to create equality and socio-economic development in the country. It has also introduced several key reforms to ensure economic stability, transparency and an efficient tax regime, he said.
The objective of the recent measures introduced by the government is to establish a level playing field. The mid single digit inflation, sound foreign reserves and debt servicing capacity are some of the initiatives to improve the economy of the country in addition to fiscal policy reforms. The measures are also intended to improve the competitive business climate, he said.
In the process of implementing comprehensive para tariff regime along with GSP plus facility, Sri Lanka will soon have market access to India. There need to be a meaningful integration of value chain to drive in to the future.
The government has been working on bringing new key reform agenda and making the country more attractive for potential investors. Sri Lanka is setting the stage to become the fast growing centre in the Indian region integrating socio-economic development to the country’s benefit, he said.
Sri Lanka has become an excellent regional hub for investment and trade and the geography offers a unique opportunity and a spring broad to access the global market place. The government is focused on improving investor confidence, transparency, resolve investor issues and scaling up the Ease of Doing Business Index. The process has improved tremendously and the number of days taken to complete investor requirements has been cut short, Minister of International Trade Malik Samarawickrama said.
“There is land available for new investors. A new export processing zone will be open for private investments. Measures will be taken to expand market access in the countries such as the UK, India, China and Japan. A number of trade agreements with major countries will be signed shortly. The negotiations on comprehensive economic partnership agreement with India will continue till December and there is also negotiations on FTA with Thailand at present, he said.
The new Inland Revenue Act is modern, transparent and has been streamlined the process for easy usage. The corporate tax under the Act is lower than many Asian countries including India and Bangladesh. The investors are encouraged to come to Sri Lanka and they receive capital allowance under the Act. The country has created new incentive regime and has targeted the genuine investors. The Act also looks at the taxable period which is starting after the commercial operations. Sri Lanka has sign agreements to avoid double tax with most of the countries, he said.
“We invite the potential investors to take part in our growth story and will provide all the necessary facilities from the government. As the country is capable of attracting FDIs, the BOI is expected to play a leading role in facilitating this process,” he said.
The government has taken many initiatives to revive the economy and has taken many measures to build stability. The prudent measures to consolidate the fiscal management have yielded positive results and it is confident of meeting foreign debt obligations, he said. Acting Chairman Ceylon Chamber of Commerce, Dr. Hans Wijesuriya said the event has been grown in size and impact and the conclave has become a platform to focus on business and investment interest on Sri Lanka to project the country as a preferred destination.
There has also been a steady growth in the number of delegates participating and this year the number has increased to 100 from 20 countries around the world.
The exports reaching all time high and consistency in policies has a positive impact on trade and investments which is the key trajectory in Sri Lanka’s drive forward, he said.
The expansion of regional and global market place together with investment and business acceleration is building momentum. Developing business relationships and nurturing new contacts to access markets to make Sri Lanka a destination for business and investment has been supported by the geographical location and stewardship.
Therefore, the country needs to showcase its potential and capabilities to attract both the investors and businesses, Wijesuriya said.