Politicians, economists laud tax cuts | Daily News


 

Politicians, economists laud tax cuts

The sweeping tax cuts announced this week by the new Government led by President Gotabaya Rajapaksa were lauded by many businessmen and politicians stating that those were likely to give impetus to stronger corporate earnings. They pointed out those proposals when implemented would help boost the ailing economy. Many of them expressed their confidence that the new tax concessions announced at the first Cabinet meeting under the newly-elected President Gotabaya Rajapaksa would benefit the public at large while revitalising the local economy by reversing the previous regime’s unsuitable economic policies which imposed heavy tax burden on the country.

 


Immediate and substantial boost in consumer spending - CAL

Meanwhile, Capital Alliance (CAL) Research, an independent research unit that provides comprehensive research and analysis of Sri Lanka’s equities and economy, said in a note that the new tax concessions are likely to trigger an immediate and substantial boost in consumer spending.

“The tax cuts will certainly, however, be seen as significantly market positive. Nonetheless, given the lack of information at this point – we advise our clients to play the ‘Sure Winners’ viz a market-wide momentum-trade,” it stated.

The CAL Research said it believes that the earnings of banks and financial services would see an immediate boost upon the removal of Debt Repayment Levy and NBT. Withholding Tax removal may also see borrowing costs reducing over the medium term, it added.

It further commented that the earnings on the consumer sector are likely to boost from PAYE tax removal.

“The removal of PAYE tax is likely to increase the disposable incomes of consumers thereby boosting consumer volumes substantially,” it added.

 


How would the Govt. cope with revenue loss? – Dr. Harsha de Silva

Former Economic Reforms and Public Distribution Non-Cabinet Minister Dr. Harsha de Silva, commenting on the new Government’s abundant tax concessions, questioned how the Government hopes to cope with the revenue loss expected from the new proposals.

“The new Government must be hoping for a huge increase in economic activity and resulting tax collections to offset the Rs. 630,000 million expected revenue loss. This is 30 percent of the expected revenue based on 2019 figures. If not, it has to be a hoax till general election,” Dr. de Silva said.

 


Tax burden was a barrier for new industries - CEETA Chairman

Chairman Colombo Electrical Equipment Traders Association (CEETA) Chairman P.G.S. Dhammika Samarawickrama said their membership was reeling under a heavy tax burden preventing them from starting any new undertaking. The new tax relief granted by President Gotabaya Rajapaksa would enable them to import raw materials for new production industries and increase sales of imported items as well.

 


More tax concessions soon - Minister S.M. Chandrasena

Environment, Wildlife, Land and Land Development Minister S.M. Chandrasena commenting on the tax cuts introduced by the new Government predicted further tax cuts in the near future.

Responding to the media, Cabinet Minister Chandrasena said the proposed tax cuts will be presented to Parliament for approval. “When Parliament sits again, hopefully we would be able to get these proposed tax cuts passed,” he added.

“The previous Government did not know how to develop this country. All they knew was how to impose a multitude of taxes on the people and oppress them. We are glad that we were able to introduce all these tax cuts in the first Cabinet meeting.” Minister Chandrasena said.

He also said all communities in the country should get together to develop the country. He also said they are committed to make President Gotabaya Rajapaksa’s election manifesto a reality.

 


Tax cuts aimed at General Election - MP Vijitha Herath

Speaking on the recent tax cuts introduced by the new Government, Janatha Vimukthi Peramuna (JVP) MP Vijitha Herath expressed their distrust on the Government’s move.

MP Herath responding to the Daily News said the new Government, like all previous Governments, gives concessions to people aiming at the next General Election. These tax cuts and concessions are temporary, MP Herath observed.

MP Herath pointed out that the previous Yahapalana Government also did the same when it was elected in 2015. “If you can remember, that Government also came up with all sorts of concessions and tax cuts. They even came up with fancy formulae to bring certain prices down. It is obvious that these tax cuts are also temporary. Every new Government comes up with tricks like that. They will definitely increase the taxes once the general election is over,” he pointed out.

 


Development through broadening of the production and services economy commendable -New Innovations Circle head

New Innovations Circle Chairman Dr. Amila Kankanamge said no country had been able to march forward economically by depending on taxes to raise its income.

It was imperative for a Government to increase people’s income through the broadening of the production and services economy.

He said the tax burden which was a disincentive for investments had been eliminated. It was a commendable step taken by President Gotabaya Rajapaksa.

This was the initial step. The second and third steps should be to develop the export market by promoting agriculture and industrial service sectors and thereafter bring in direct foreign investments.

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Will revitalise economy and uplift SMEs - Azath Salley

 

 

Former Western Province Governor and National Unity Alliance Leader Azath Salley said he was happy with the new Government’s decision to make tax concessions during their first Cabinet meeting under the guidance of President Gotabaya Rajapaksa. “This will revitalise the local economy and assist Small and Medium Scale Enterprises (SMEs) in their development,” Salley said observing that the initial signs of President Rajapaksa’s rule were “very encouraging” and that people would support his moves.

 

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Strengthening of economic standards will be expedited -Fmr CB Director

 

 

 

Former Central Bank Director and veteran Economic Analyst Vincent Mervyn Fernando said the proposed tax relief would expedite measures taken to strengthen the economic standards of people.

These relief measures would not only empower small and medium scale entrepreneurs and microfinance activists, but also the large-scale business community. Generally, they would create a new economic re-awakening in the country.

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Share transactions in service sector will increase - Financial analyst Ravi Abeysuriya

 

Financial analyst Ravi Abeysuriya said tax relief granted to stock market transactions had helped to revive the stock market.

This will increase share transactions of listed companies which served the service sector.

Local investors had received avenues to meet their financial requirements from the financial market instead of depending on the banking system.

This was a very salutary measure.

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Tax concessions, highly commendable  - Colombo Business Association General Secretary

 

 

General Secretary, Colombo Business Association Chaminda Vidanagamage said they highly appreciated the steps taken by the Government to grant overall tax relief. The decrease of the VAT from 17 to 8 percent was a highly commendable gesture on the part of the Government.

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Signals a rival in economy - SLFP Colombo North Chief Organiser

 

Colombo North Sri Lanka Freedom Party (SLFP) Chief Organiser Devamunige Nishantha de Silva said despite various constraints, President Gotabaya Rajapaksa had reduced VAT and other taxes in keeping with his election pledges. He said VAT had been decreased to eight percent and all this signalled a revival in the economy under the President’s stewardship.

 


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