Ernst & Young (EY) hosted its customary post Budget forum on Friday, with its head of Tax services Duminda Hulangamuwa highlighting significant features of the 2018 Budget as well as setting the stage for industry personalities to express their views and concerns.
This was the 18th forum since EY convened the first ever post budget forum in the year 2000, Mr. Hulangamuwa in his remarks welcomed the Budget as an impetus to the financial sector streamlining the macro economic fundamentals while encouraging various sectors of the economy
The 2018 budget has been prepared with the aim of achieving medium term targets of a per capita income of US$5,000, one million new employment, foreign direct investment of $5 billion and doubling exports to $20 billion per annum, he said.
In 2018, it is expected to achieve 5 per cent growth rate and maintain inflation of 6 per cent, a surplus of GDP of 1 per cent and a budget deficit of 4.5 per cent of GDP, he said adding that the budget with the theme ‘Enterprise Sri Lanka’ has focused on the environment and the Small and Medium-sized Enterprises (SME) sector.
The government is trying to promote exports through the SME sector facilitating entrepreneurship development and Information Technology (IT) industry.
It will allocate Rs. 10 billion to set up an enterprise development bank to provide long term loans without collateral for entrepreneurs.
The budget is also specifically focusing on facilitating trade and creating a shipping and logistics hub by removing restrictions on foreign ownership of ship agency and freight forwarding businesses, he pointed out.
Finance Minister Mangala Samaraweera told the fully packed audience of business leaders and industry personalities at this event that Sri Lanka embarks on a new path towards more liberalisation of the economy tackling fiscal imbalances, massive debt and external sector issues with the aim of consolidating growth momentum,
The country had to face natural disasters like drought and floods during the past few years and it has retarded the growth momentum, he said adding that the government will go ahead with the restructure of state-owned enterprises encouraging entrepreneurs both local and overseas to enter into PPPs.
Referring to the Ceylon Petroleum Corporation (CPC), he noted that a cost–reflective transparent fuel pricing formula, based on international market prices, will be introduced soon.
Archaic revenue collection laws including legislations like Sri Lanka Customs Ordinance No 17 of 1869 and Excise Ordinance No 08 of 1902 will be replaced with new laws to meet the modern day needs, he revealed.
Sri Lanka has already formulated a national strategy of exports and new trade policy providing a clear direction for sustainable export –led growth to make Sri Lanka a key trade hub in the Indian Ocean, Minister of Development Strategies and International Trade Malik Samarawickrema revealed at the same event.
He said that negotiations to finalise the Free Trade agreement with Singapore will begin next week and the agreement could be signed by March next year.
The Grand Hyatt Colombo which is under construction and Colombo Hilton will be divested in the stock market, he said adding that several other SOEs are in the pipeline to follow suit.
Meanwhile in a separate media statement Sujeeve Samaraweera President – National Chamber of Commerce of Sri Lanka said the new concept to improve the business environment through “Enterprise Sri Lanka” would be a positive step taken by the government. He pointed out that the government‘s budget proposal of woman entrepreneurship, SME Development and agri and plantation sector development would bring positive results. He also welcomed the proposals to set up a development bank to support the financial needs of the SME sector and encouragement provided for deep sea fishing and infra structure facilities for fisheries sector.The development proposals focusing on tourism will also help the economy to expand.