Ceylon Chamber welcomes growth oriented National Budget 2021

The Ceylon Chamber of Commerce welcomes the proposals put forward by the Prime Minister in the National Budget 2021 which are business friendly, production oriented and demonstrative of policy continuity. The Budget has focused on boosting economic growth by enhancing exports, providing investment relief for key thrust sectors supplemented by public investment proposals, promoting capital markets and supporting the growth of Startups and SMEs.

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The emphasis on tax policy continuity and measures announced to strengthen tax administration demonstrates a strong commitment to policy consistency while strengthening and broad basing revenues.

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The Chamber in its Pre-Budget proposals highlighted the importance of the Government maintaining the current tax laws and rates at least for the next five years or so thereby providing the necessary consistency in tax policy.
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The adoption of a consistent tax policy under the National Budget 2021 would not only provide a platform for proper planning for business but would also help the Government in long term cash flow planning and strengthening fiscal consolidation.

The Chamber also welcomes the tax relief for investment in machinery and equipment for domestic manufacturing and exports and the relaxing of import restrictions on certain sectors in line with past recommendations by the Chamber. Proposals on enhancing Digital governance, investments in technology and infrastructure including rural connectivity to facilitate digital inclusion are also notable.

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We trust the commendable proposals in the Budget will see timely implementation and will continue to involve private sector consultation. The Chamber looks forward to the facilitation of further stakeholder engagement with respect to holistic labor reform and the placement of the proposals related to the extension of the retirement age and the contribution of 0.

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25% on turnover towards an insurance fund, within the context of the said broader reform agenda. With respect to wage reform, the Chamber recommends that reliance continues to be placed on the time-tested mechanism of collective bargaining which has so far been adopted consistently across industry sectors and encompasses factors related to productivity and worker welfare, and as such that the government reconsiders the budget based wage intervention for the plantation sector. The incorporation of productivity linkages within the proposal to increase wages of plantation sector workers is also a subject which merits further consultation.
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The Chamber trusts that the positive benefits accrued from the macro stability set out by National Budget 2021 will provide a foundation for sustainable growth acceleration over the medium and long-term as envisaged.

The Chamber is also hopeful that the Government will pivot on the growth foundation established, to continue its progress in reforms on several key agendas including but not limited to those related to Local and Foreign Investment, Debt management, Export promotion, State-Owned Enterprises (SOEs), Capital market and productivity enhancements in the public sector.

The Ceylon Chamber in its capacity as the premier representative of the private sector, looks forward to an ongoing engagement with the Government, and for the opportunity to play a meaningful role alongside the private sector at large, with respect to the implementation of the budget proposals.

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The Chamber will continue to support the Government’s initiative to effectively execute a Public-Private Shared Vision for accelerated Economic Revival and Social Sustenance.
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(Media Release)

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