Proposed Finance Bill deter private sector investments: chamber

The proposed Finance Bill discourages private sector investment as it sends a negative signal and is likely to deter investment, the country’s premier trade chamber Ceylon Chamber of Commerce (CCC) said.

The chamber therefore urged the government to make amendments to the bill. 

A statement issued by the CCC said the Finance Bill of March 2015, presented to Parliament recently, sends a negative signal to the private sector and is likely to deter investment. It said it is unfortunate since the bill comes at a time the Sri Lankan private sector was gearing itself to partner the government in realizing the full potential of the country’s economy. 

“However, the proposed bill is likely to be perceived as a serious impediment in building a credible and deep partnership between the government and the private sector,” the statement said, urging the government to make suitable amendments, prior to the enactment of the bill.

The CCC said the proposed taxes are retrospective and signal an absence of policy stability and consistency, which are crucial for enticing investment. 
Citing an example the CCC said the Super Gain Tax (SGT) is based on profits declared during the financial year 2013/14, while the proposed threshold of Rs.2 billion and the rate of 25 percent are both arbitrary and deviate from the generally accepted principles of taxation. 

In terms of the provisions of the bill, the subsidiaries of group companies, with individual profit levels below the threshold, will also be liable for SGT if the aggregate profit of the group exceeds Rs.2 billion and the absence of marginal relief makes the SGT inconsistent with the existing taxation policy.