Industrial Association urges govt. to impose FDI-friendly legislation
The Industrial Association of Sri Lanka urged the government not to impose legislation which would harm future foreign direct investments (FDIs) to the country.
“We wish to urge the government to ensure a consistent policy framework and refrain from imposing one-off taxes such as the Super Gains Tax and the laws such as the Land Alienation Bill, which could be harmful to possible FDIs,” IASL Chairman Nilam Jayasinghe said.
The one-off retrospective taxes— said to be politically motivated— were not passed during the interim budget debate since the UNP was operating a minority government.
Finance Minister Ravi Karunanayake said that businessmen who would be affected by the taxes influenced the opposition to turn down the revenue measures.
The government’s interim budget deficit target of 4.4 percent of gross domestic product (GDP) was largely dependent on these taxes. The International Monetary Fund (IMF) recently said that the budget deficit would be 5.5 percent of GDP. This is despite the balance of payments reducing due to the fall in global oil prices. To reach the deficit targets set in January, the proposals have been re-forwarded to parliament under the new unity government.
Meanwhile, prior to elections, Karunanayake had said that the Land Alienation Bill would be relooked at to facilitate FDIs. However, he criticized foreign ownership of land while addressing the media this week.