Construction Industry welcomes benefits through tax cuts | Daily News


 

Construction Industry welcomes benefits through tax cuts

“Although the announced tax cuts have no immediate impact on the construction industry from July onwards, its beneficial effects are expected as the lowered taxes would be effective from April 01, 2020. As such, it is a welcome move to the construction industry,” said Eng. Nissanka Wijeratne, Former Secretary to Ministry of Housing and Construction and present Secretary General /CEO of the Chamber of Construction Industry addressing a seminar organized by the CCI Sri Lanka and held on Friday in Colombo on “Measures to revive the domestic construction industry.”

Eng. Nissanka Wijeratne pointed out that the construction industry’s contribution to the country’s GDP amounted to 08 percent and as such, the delay in outstanding payments to contractors and consultants for the ongoing government sponsored projects in the last quarter of 2019 and first quarter 2020, had created a major issue on the survival of the industry. He also expressed optimism that after the Parliamentary Elections due in April, normalcy would return to the political scene and economic activities with a stable government in place. He further emphasized the need for new regulations to safeguard the interests of the domestic construction industry in encountering stiff competition from foreign constructors operating in foreign - funded projects, who utilize same machinery and manpower to undertake locally financed projects despite legal limitations.

Deputy Governor of the Central Bank of Sri Lanka, Mahinda Siriwardana, explained the current economic outlook and said the country’s external vulnerability is high due to foreign debt volume of USD 56 Billion which was around 62 percent of GDP in 2020. The consequent debt servicing obligations are estimated at USD 06 Billion on this year. However, with stable monetary and fiscal policies to be expected after the Parliamentary Elections, the fiscal deficit currently at 6 -7 percent of GDP is hoped to be gradually reduced to 04 percent during 2020 -2024. He also stressed that CBSL is ever mindful of the important role played by the domestic construction community to the national economy.

Former Chief Justice and Attorney General Mohan Peiris, urged the need for speedy conflict resolution in the construction industry through arbitration among the respective parties as provided for in the Construction Industry Development Authority Act., instead of litigation involving judicial procedures at high financial costs and waste of time.

Project Director of Western Region Planning Project and Aerocity Development Project, Planner Lakshman Jayasekera stressed that developing countries such as Sri Lanka, although lack of funds for launching development projects are rich in assets and skills, which could successfully be harnessed for development, without seeking foreign loans, by entering into strategic ventures based on Public – Private Partnership. While citing many examples from South and East Asian regions, he presented a list of projects identified as viable in Sri Lanka.

Former Secretary to the Ministry of Transport Eng./Planner Nihal Somaweera contributed to the seminar on improvements to the Railway Network and Investment Potential while Eng.Mevan Gunatilleke, Executive Director,Sankan Overseas (pvt) Ltd., spoke on the export of Construction Services Merchant Bank of Sri Lanka and CEYLEX Engineering Pvt. Ltd., were sponsors to the event.


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