Business community wants political stability restored soon | Sunday Observer

Business community wants political stability restored soon

Business personalities expressing views on the current political stalemate called upon all parties to speedily resolve the crisis and restore stability to boost business confidence in the country.

Principal, Tax and Regulatory, KPMG Sri Lanka, Suresh Perera said certainty in the business environment and in the tax rules is vital in attracting and maintaining local and foreign investor confidence . Local investors have been lamenting about the lack of certainty in the tax rules pertaining to industries.

Frequent changes with regard to tax policies, inordinate delays in legislating and implementing tax policy proposals, ambiguities and complexities of tax laws, plethora of taxes and duties, retrospective laws, inefficiency in the tax appellate procedure, and the delay in appointing members to the Tax Appeals Commission leading to the creation of a backlog of cases, are critical factors which contribute to the uncertainty in the tax system.

The current Constitutional crisis has aggravated the volatility and uncertainty in the tax system. According to the legal tax framework in Sri Lanka, tax policies become enforceable only upon legislation of the same, either by amendments to the respective Tax Statutes or, where appropriate, issuance of Gazette Notifications as secondary legislation by the Minister-in-Charge under the appropriate Tax Statutes.

The delay or the gap between policy pronouncements and legislation by way of primary or secondary legislation leads to uncertainty and speculation. Tax payers and investors have witnessed tax policy pronouncements made by various authorities failing to become part of the legal tax framework of Sri Lanka. This creates confusion in business planning of investors.

The establishment of the National Tax Council with appropriate powers proposed in the Budget 2017 is a means of preserving the certainty and the stabilization of the tax system. The appointment of the Commissioner General of Inland Revenue and Finance Minister are all tainted with controversy and this does not augur well for investment activities.

The immediate conclusion of the constitutional crisis is a pre-requisite for the stabilisation of the economy and making policies for improving the confidence of investors.

Heladiv Group and former Tea Exporters Association Chairman Rohan Fernando said the current political impasse is not conducive for any economic or social activity. The business community is most worried about the unsettled conditions on economic policy especially in terms of the vulnerability to change fiscal policies with the possible reverse of the Government in office. The foreign governments adopting a wait and see stand can further relegate the country to an unstable status.

The fluctuating exchange rate adds to the economic woes. Although an economy of our size can absorb shocks better than a large economy, the unfortunate mishandling of the political fallout could distance investors and tourists from our shores.

People have lost faith in current day politicians and are eagerly looking for new faces to lead the country towards social and economic development. We need people with proven track record in the world of commerce and professional establishments as opposed to politicians, the type we now have in Parliament.

We also need a new Constitution and not tinker with the one we have using clauses to protect the political masters and leave loopholes to manipulate power and indulge in skulduggery. The Bond scam involving the Central Bank and the corrupt deals often spoken about in the media are examples why we cannot accept a vast majority of the politicians currently holding office. The country need a small group of honest and dedicated people to rejuvenate the crestfallen citizenry of this nation.

Leaving room to crossover; allowing the sale of duty free permits, unlimited array of fringe benefits, pension after a only five years and security escorts of repulsive formation are not acceptable from peoples representatives. Have these persons come to serve the people or serving themselves at our expense.

A drastic change in the political system followed by fresh elections appear to be the immediate solution. People too are responsible for sending persons with tainted persona to represent them. At the next election the political parties must field candidates with a clean record and if not people may abstain from casting their vote”

Company director and consultant Sunil Wijesinghe said today every newspaper, radio and TV channel give pride of place to the interpretation of the constitution, and debates on the current crisis. There is hardly any article on management, productivity, or economics. While there is no doubt the current crisis needs to be resolved, could we also focus on building up our economy and improving the productivity of our enterprises?

Colombo Shippers’ Academy CEO Rohan Masakorala said we need a lot of international confidence and stability in the destination to invite international cargo owners, buyers, logistics companies to use Sri Lanka as the preferred distribution centre for Asia and Africa,” Hub Operators’ Association of Sri Lanka President Rohan Masakorala said.

“I can confirm potential business opportunities are on hold and in most cases, the business travellers are reluctant to come and visit the island as the travel insurance premiums have gone up,” he added.

Masakorala said they have done a lot of work with the Export Development Board and National Export Strategy to start marketing Sri Lanka as the best geographical location for logistics and distribution.

“Very recently we introduced new laws for e-commerce and liberalised the small consignment handling environment (LCL) to attract investors.

We are in the process of doing promotional videos and destination marketing events overseas but given the current political impasse and the fractured political structure, all are coming to a gradual standstill and more worrying is that the country image is at stake as people take a wait and see approach,” he said.