The Ceylon Chamber of Commerce (CCC) appreciates the fact that land is an extremely scarce resource, especially in a small island such as Sri Lanka and it needs to be prudently and productively utilized for the overall well-being and benefit of the nation. In such a context, CCC also recognises that the government has the duty and prerogative to bring about prudent legislation to address concerns, if any, and when appropriate.
However, the CCC underscores that it is equally important that such legislation is coherent and consistent with other national objectives which in this instance are growth in the economy and enhancement of investment, trade & commerce.
Having deliberated on the matter at length, especially with regard to attracting Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII), vibrancy of the Stock Market and above all improving the ease of doing business ranking - a prerequisite to attracting quality investment to the country - the CCC has made its representations to the government and more specifically to the Ministry of Finance and Planning.
The CCC sincerely believes that the authorities concerned would take cognizance of these concerns and bring about balanced and appropriate amendments in the national interest.The salient aspects that were highlighted by the CCC as concerns are;
• To use the definition in the Inland Revenue Act to define the status of a company registered in Sri Lanka; i.e. whether it is foreign or resident and not base such determination on the level of foreign equity. Alternatively, exempting BOI Companies with a minimum investment threshold and PLCs from the application of this Bill, which will encourage listing of companies, attract FDI and FII and result in a buoyant stock market with positive benefits to the economy.
• Reducing the Land Lease Tax to 5%, if the desire is to collect the tax upfront, with indenture of the lease. Alternatively, such tax at the presently stipulated rate may be levied, if collected annually, rather than upfront.
• Exclusion of short-term leases /rentals (say up to 10 years) from the application of the Bill.
• Making the Bill prospective, avoiding any implications to business decisions that may have been already made based on the existing policy and administrative framework. In the same tenor, making the Bill retrospective would also be seen as a “lack of consistency” in government policy, by investors, which in turn would create vulnerability and impact the ease of doing business rank.
• Formulating prudent administrative mechanism/procedures to efficiently and effectively deal with registration and monitoring of lease and purchase of property.
The CCC as a responsible business chamber strongly believes that the accommodation of these suggestions are crucial in order to attract FDI, FII, improve the ease of doing business ranking and ensure a vibrant & thriving equities market.
Thus the CCC is confident that these suggestions will be addressed in the Bill that is to be enacted shortly.
The CCC re-iterates its strong & continued support to the Government of Sri Lanka to create a vibrant business environment that enables the transformation of our Country’s economy for the benefit of its people.