The country’s exporters last week hinted that they were not getting due recognition to their contribution to the national economy, highlighting they function in an extremely uncertain policy environment and amid a number of unresolved issues. Ceylon Chamber of Commerce (CCC) Import Section Chairman Dinesh de Silva arguing a case for equal treatment for both exporters and importers said the sector is “watchful” of the government’s direction as their industry forms a major part of Sri Lanka’s economy.
“We will be hopeful that the government will engage in a wider consultation processes and be more consistent over trade and tariff policies. It is important to have consistent and predictable policies that would enable the private sector to play an active role in trade,” said de Silva, addressing the 81st Annual General Meeting of the CCC Import Section.
He charged that impo r ters have experienced instances of “ad-hoc implementation of decisions,” which have heavily impacted their line of business, taking away the confidence in making long term decisions without hesitation. In a bid to improve the existing trading climate, it was urged to identify and amend the Import Export Control Act, Exchange Control Act, Custom Ordinance, and the Sri Lanka Ports Authority Act. Pointing out the government’s effort in increasing revenue through the Customs, de Silva noted that increased focus on such has led to import prices being artificially inflated. “High tariff and trade barriers tend to be pro-producer and anti-consumer. Higher tariff reduce efficiencies in companies.
Therefore we believe the government must be more cautious when increasing import duties,” de Silva stressed. Sri Lanka Customs was initially given a target of Rs.886 billion for 2016, which was later revised to Rs. 953 billion. Of the total estimated government income of Rs. 2,004 billion this year, approximately 50 percent is expected from the Customs. Highlighting the impacts on the sector due to recent changes in the economy, it was pointed out that the tax policy uncertainly weighed heavily on the import trade. Several tax and other regulatory changes announced in the 2016 budget, particularly, VAT, PAL, and NBT had hit the sector. Importers were also affected by the devaluation of the rupee against the US dollar into unprecedented levels. De Silva noted that while imports create a platform for local producers to move forward, innovate, and strongly compete with other products, free trade is not widely accepted as completely beneficial to all parties.