Budget 2019 : Industrial chamber calls for more R&D to boost exports

The Ceylon National Chamber of Industries (CNCI) in its proposals for budget 2019 has called upon the government to formulate a Customs and Excise Duty structure to create a level playing field for local industries.

Further the Chamber seeks to increase the current Cess for imports under the HS Code 3905.12, 3905.21, 3903.90.10, 3906.10.10, 3906.90.10, 3910000 and 32082010 by five percent to safeguard local manufacturers.

CNCI Chairman Raja Hewabowala said the Chamber has requested the government to promote research and development activities to build awareness on export market demands in terms of the labour skills gap and the private sector to cater to export market demands.

‘We request policy makers to strengthen research on indigenous industries in the country and launch a national plan including low cost advertising and sales promotion programs for SMEs. We urge the government also to conduct an annual survey on SMEs to develop them to reach export markets and bring in the much needed foreign exchange to the country,” the Chamber chief said.

The Chamber proposes to develop traditional arts and crafts industries for promotion of tourism. Low interest rate loan schemes, training, foreign exposure should be provided to promote indigenous industries.

CNCI also appeals to the law makers to set up industrial parks in each district mainly in rural areas to promote industries. It states that separate industrial parks should be set up to maintain hygienic and qualitative status of food products and encourage traditional food cultivation to support the economy.

“We also request the government to amend the concessionary income tax rate applicable to exporters. The 80 percent threshold level for exporters to qualify for concessionary income should be amended. This threshold is a barrier to promote exports as many business entities enter the export sector gradually,’ Hewabowala said. The Chamber also calls upon the government to formulate a national and industrial policy for labour market development to provide skilled labour. The Chamber notes that the current labour laws need to be simplified and made relevant to meet the needs of time.

The Chamber said that it is concerned about foreign construction companies taking over mega projects of Sri Lankan companies.

“All the materials and labourers are imported directly from their countries for these projects. There is no income generation within the country for the local business community.

We propose that all the mega construction projects by foreign companies should use a minimum 50% of local labour and local materials or use materials imported by Sri Lankans.

The Chamber requests that the procedural and legal system be upgraded for efficient arbitration within the business community.

‘We appeal to the authorities to obtain the services of Sri Lankan embassies and overseas missions to create awareness on Sri Lankan exports, attract FDIs and promote joint venture projects for capital infusion and introduction of modern technology to the country.

A tax of Rs.10 per kg on industrial raw material was slapped at the 2018 Budget which affected industries. Cable and pipe industries were affected by the duty. The Chamber proposes the withdrawal of the excise duty for HS Codes 3901.10 and 3902.10.

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