An apex body of exporters, the Exporters’ Association of Sri Lanka (EASL), yesterday expressed concerns over the 2017 budget not providing the necessary support for the export sector.
“Whilst understanding the current state of the economy and that this budget is more corrective in nature, it does not address the need to progress the export industry,” an EASL statement said.
It noted that increasing income taxes from 12 to 14 percent and abolishing the Simplified Value-Added Tax (SVAT) scheme would be a disincentive to increase export values and called on the SVAT system to be continued until the automated tax portal is fully functional.
“Furthermore, the imposition of the trade-in services tax of 14 percent, which has negated the zero tax on entrepot trade, could have a negative impact on this activity,” the lobby group further added. It noted that increasing the Economic Service Charge will have an impact on high-value, small margin exporters, for whom relief should be given to ease cash flow burdens.