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'Varying Assessments':
13 Jul 2013 10:38:38
Local Authorities levying varying property assessments from 5%-30% - IASL


Jul 13, 2013 (SLBO) - One of the major official bodies that represent Sri Lanka’s largest industries - Industrial Association of Sri Lanka recently said that currently varying assessments from 5% to 30% are levied by different Local Authorities on property rates.



Speaking at the Annual General meeting of IASL – Chairman Pravir Samarasinghe said that they have made submissions for an affordable and uniform structure for property rates for Small and Medium Enterprise (SME) and other industries.



“We are confident necessary laws will be enacted shortly” he told.

Samarasinghe who is also the Group Chief Executive Officer of Overseas Realty Ceylon PLC (owning
company of Iconic Colombo Properties – World Trade Centre and Havelock City) said that ‘Restriction on land ownership by foreigners’ are also a main concern.



“ A number of our members and other large manufacturing companies in Sri Lanka are foreign owned” Samarasinghe stressed adding that they were ‘Disturbed’ by the initial announcement of a ban on foreign ownership of land and the imposition of a 100% tax on leasing of land which would curtail expansion and entry of foreign owned manufacturing entities.



However, he noted that their association pro-actively canvassed against such guidelines and they are now pleased to note that certain exemptions have been granted to long established and listed companies and the envisaged land tax rate has been reduced.



“We appeal to the Minister to prevail upon the authorities to also exempt BOI approved entities leasing premises in industrial zones from such land tax” he urged adding that they are confident necessary laws will be enacted shortly.
Concerns on ‘Energy Cost’



He also pointed out that promoting self generation and supply of electricity to group companies located within the same premises through wheeling and to the Ceylon Electricity Board (CEB), under net metering had been pursued.

“The latter has become a reality now. We also took up measures to reduce CEB’s cost of generating power including investment in coal power plants, improvements to the mix and utilization patterns of different sources of power and the re-negotiation of pricing in PPA’s entered in to at very high rates.

Outlining some major constraints IASL members face he also said that they will continue lobbying for concessions for investment in advanced technology including the reduction of upfront levies associated with importing plant and machinery. According to Samarasinghe they have made proposals to encourage the re-location of industry from congested sites to areas outside the Western Province and thereby create economic activity and employment in lesser developed regions.

Samarasinghe als told that they have been proposing flexibility for important work arrangements such as shortening the five and a half day working week with the same number of hours spread over five days and removing certain restrictions for night work for Women under the Shop & Office Employees Act, which will create a more enabling environment for employment generation and investment.

“The sound management of the economy with consistent policies and maintaining an investor friendly environment is important to sustain economic growth and private sector investment” Samarasinghe added.

He said that Industrialists are pleased with the taxation reforms introduced three years ago with greater rationalisation, simplification and reduction of taxes. Steps taken in the last budget by the Government to harmonize the BOI and Inland Revenue Department tax regimes are encouraging and he said that those policies have continuously highlighted to create an even playing field.

“We are also encouraged by the Government’s increased investment in infrastructure which helps build the foundation for economic development” Smamarasinghe said adding that they however, await more meaningful reforms to education system to bring about a more demand driven talent pool.

“Although we have enjoyed high and stable growth with low inflation for over 3 years, an area of concern has been the non-achievement of Government fiscal targets and the overshooting of State expenditure resulting in increased Government borrowings and more particularly foreign debt and the consequential external sector vulnerability” he added.

According to him another important aspect highlighted by IASL members is, to attract much needed investment and FDI to support the desired growth levels are investor confidence. In that regard Samarasinghe noted that transparency, policy consistency, good governance and the upholding of Law and Order are important ingredients to build investor comfort.

According to him IASL members are also encouraged by the Government’s initiations to promote regional industrial development, industrial estates, SMEs and cottage-based industries as well as import substitution industries. He noted that they are very positive policy directions that IASL had been advocating. “We look forward to Government support for SMEs to have easier access to credit and facilitate forward linkages with larger industries who have better access to markets” he said.

He stressed that the lower inflow of FDI and investment into the industry sector is of concern. Although industry accounts for 30% of GDP and the factory sub-sector has a major 17% share of this, manufacture grew only by 5% in 2012 down from 8% a year ago. "It is important that suitable conditions are maintained for industry competitiveness and development" Samarasinghe added.

We strongly believe the manufacture of actual tangible goods have true potential to create real value addition to the economy, employment generation to our work force and bring about a meaningful upliftment to our economy and living standards of our people. Hence, it is important that we nurture, protect and foster the growth of industry through the implementation of sound Industrial Policy.

He said IASL strongly believes Sri Lanka to have a healthy and well balanced economy and that with high sustainable growth the export sector is of vital importance.

“Today industry accounts for 75% of our exports, although its share to GDP has gradually declined over the last two decades” he pointed out adding further, industrial export growth declined to 7% last year and has been negative this year with depressed North American and European markets.
According to him both the private and Government sector must play an important role in reviving Sri Lanka’s export industry. He highlighted that Sri Lanka must look at alternative markets in Asia and diversify value added product portfolio.

He outlined that only 5% of Sri Lanka’s exports are to India and India’s large and fast growing market provides huge opportunities to local industrialists.

“Exporting branded and finished goods to the large consumer market and intermediary products and components to the growing manufacturing base in India should be aggressively pursued by our industrialists and we need continued State support to eradicate the unfair barriers for entry into India” he said.

Last year IASL had entered into a MOU with the All India Association of Industries that represents almost all major manufacturing and service sectors nationally and at regional level. Samarasinghe noted that the main objective was to build closer relationships with Indian counterparts and gain easier entry into the Indian sub-continent where almost 23% of the world population lives. “Our membership must take advantage of this partnership and request any assistance from the Secretariat” Samarasinghe said.