May 30, 2014 (LBO) – Sri Lanka wants foreign investors to set up joint ventures where the output will be allowed to be sold to the domestic market, investment promotion minister Lakshman Abeywardena said, amid fears of new protectionism. When import duty protected industries expand, the state also loses tax revenues as taxes that would have gone to the state are instead raked in by the favoured business interest.
Abeywardena said in the case of motor vehicles no assembly plants will be allowed as there were not enough domestic parts production.
He questioned reporters what was the problem of approving more industries to a sector who would sell in the local market.
Abeywardena said firms may be given permission to sell 30 or 40 percent of their output in the domestic market.
Reporters told Abeywardena that if more industries are approved to produce and sell in an import duty protected sector where a state-protected monopoly already existed there may be more competition.
But the burden came if additional duty protected areas were created to tip the scales to favoured business interests against the ordinary people.
“We cannot impose any tax or remove them on our own,” Abeywardena responded.
“We have to