INSUBCONTINENT EXCLUSIVE:
The sweeping tax cuts announced this week by the new Government led by President Gotabaya Rajapaksa were lauded by many businessmen and
politicians stating that those were likely to give impetus to stronger corporate earnings
They pointed out those proposals when implemented would help boost the ailing economy
Many of them expressed their confidence that the new tax concessions announced at the first Cabinet meeting under the newly-elected
President Gotabaya Rajapaksa would benefit the public at large while revitalising the local economy by reversing the previous regime
unsuitable economic policies which imposed heavy tax burden on the country.Immediate and substantial boost in consumer spending -
CALMeanwhile, Capital Alliance (CAL) Research, an independent research unit that provides comprehensive research and analysis of Sri Lanka
equities and economy, said in a note that the new tax concessions are likely to trigger an immediate and substantial boost in consumer
spending.&The tax cuts will certainly, however, be seen as significantly market positive
Nonetheless, given the lack of information at this point & we advise our clients to play the ‘Sure Winners& viz a market-wide
momentum-trade,& it stated.The CAL Research said it believes that the earnings of banks and financial services would see an immediate boost
upon the removal of Debt Repayment Levy and NBT
Withholding Tax removal may also see borrowing costs reducing over the medium term, it added
It further commented that the earnings on the consumer sector are likely to boost from PAYE tax removal
&The removal of PAYE tax is likely to increase the disposable incomes of consumers thereby boosting consumer volumes substantially,& it
added.Tax burden was a barrier for new industries - CEETA ChairmanChairman Colombo Electrical Equipment Traders Association (CEETA) Chairman
Dhammika Samarawickrama said their membership was reeling under a heavy tax burden preventing them from starting any new undertaking
The new tax relief granted by President Gotabaya Rajapaksa would enable them to import raw materials for new production industries and
increase sales of imported items as well.More tax concessions soon - Minister S.M
ChandrasenaEnvironment, Wildlife, Land and Land Development Minister S.M
Chandrasena commenting on the tax cuts introduced by the new Government predicted further tax cuts in the near future.Responding to the
media, Cabinet Minister Chandrasena said the proposed tax cuts will be presented to Parliament for approval
&When Parliament sits again, hopefully we would be able to get these proposed tax cuts passed,& he added.&The previous Government did not
know how to develop this country
All they knew was how to impose a multitude of taxes on the people and oppress them
We are glad that we were able to introduce all these tax cuts in the first Cabinet meeting.& Minister Chandrasena said.He also said all
communities in the country should get together to develop the country
He also said they are committed to make President Gotabaya Rajapaksa election manifesto a reality.Tax cuts aimed at General Election - MP
Vijitha HerathSpeaking on the recent tax cuts introduced by the new Government, Janatha Vimukthi Peramuna (JVP) MP Vijitha Herath expressed
their distrust on the Government move.MP Herath responding to the Daily News said the new Government, like all previous Governments, gives
concessions to people aiming at the next General Election
These tax cuts and concessions are temporary, MP Herath observed.MP Herath pointed out that the previous Yahapalana Government also did the
same when it was elected in 2015
&If you can remember, that Government also came up with all sorts of concessions and tax cuts
They even came up with fancy formulae to bring certain prices down
It is obvious that these tax cuts are also temporary
Every new Government comes up with tricks like that
They will definitely increase the taxes once the general election is over,& he pointed out.Development through broadening of the production
and services economy commendable -New Innovations Circle headNew Innovations Circle Chairman Dr
Amila Kankanamge said no country had been able to march forward economically by depending on taxes to raise its income.It was imperative for
a Government to increase people income through the broadening of the production and services economy.He said the tax burden which was a
disincentive for investments had been eliminated
It was a commendable step taken by President Gotabaya Rajapaksa
This was the initial step
The second and third steps should be to develop the export market by promoting agriculture and industrial service sectors and thereafter
bring in direct foreign investments.Will revitalise economy and uplift SMEs - Azath SalleyFormer Western Province Governor and National
Unity Alliance Leader Azath Salley said he was happy with the new Government decision to make tax concessions during their first Cabinet
meeting under the guidance of President Gotabaya Rajapaksa
&This will revitalise the local economy and assist Small and Medium Scale Enterprises (SMEs) in their development,& Salley said observing
that the initial signs of President Rajapaksa rule were &very encouraging& and that people would support his moves.Strengthening of economic
standards will be expedited -Fmr CB DirectorFormer Central Bank Director and veteran Economic Analyst Vincent Mervyn Fernando said the
proposed tax relief would expedite measures taken to strengthen the economic standards of people.These relief measures would not only
empower small and medium scale entrepreneurs and microfinance activists, but also the large-scale business community
Generally, they would create a new economic re-awakening in the country.Share transactions in service sector will increase - Financial
analyst Ravi AbeysuriyaFinancial analyst Ravi Abeysuriya said tax relief granted to stock market transactions had helped to revive the stock
market.This will increase share transactions of listed companies which served the service sector.Local investors had received avenues to
meet their financial requirements from the financial market instead of depending on the banking system.This was a very salutary measure.Tax
concessions, highly commendable - Colombo Business Association General SecretaryGeneral Secretary, Colombo Business Association Chaminda
Vidanagamage said they highly appreciated the steps taken by the Government to grant overall tax relief
The decrease of the VAT from 17 to 8 percent was a highly commendable gesture on the part of the Government.Signals a rival in economy -
SLFP Colombo North Chief OrganiserColombo North Sri Lanka Freedom Party (SLFP) Chief Organiser Devamunige Nishantha de Silva said despite
various constraints, President Gotabaya Rajapaksa had reduced VAT and other taxes in keeping with his election pledges
He said VAT had been decreased to eight percent and all this signalled a revival in the economy under the President stewardship.
