Business

Export Chamber to submit policy document to Govt.

– Trade-related concerns to be detailed

– Not a request for incentives

By Madhusha Thavapalakumar

The National Chamber of Exporters (NCE) is expected to submit a policy document comprising trade-related concerns and requests from the sector, to the newly elected Government.
NCE Secretary General and Chief Executive Officer Shiham Marikar told The Sunday Morning Business that the policy document is in its drafting stage at the moment and it will obtain suggestions and concerns from the stakeholders.
“We are currently in the process of preparing a set of proposals to include in the policy document. There are a number of proposals we are planning to take up,” Marikar noted.
In addition to concerns and suggestions, the document will also emphasise the implementation of strong policies which would protect the sector, according to Marikar.
On a further note, he added that the policy document would certainly not be a request for incentives as the sector has very well understood the debt burden and repayment issues of the Government.
Even though he stated that it is premature to disclose the details of the proposals that would be included in the policy documents, requesting transparency on the collection of the Ports and Airports Development Levy (PAL) and utilisation of the funds raised under the levy is a key proposal.
The NCE is expected to have a meeting this week with trade-related chambers and associations to obtain their concerns, which will be followed by another discussion with government officials from the subject ministries.
Marikar did not disclose a precise time during which the policy document will be submitted to the Government, but noted it would be early next year.
As reported by The Sunday Morning Business on 4 August this year under the headline “Ports and Airports Development Levy never used for port or airport development”, the PAL, introduced in 2009, has never been used for the development of Sri Lanka’s ports or airports as its name would have one believe.
The Sunday Morning Business learnt that the funds raised under the levy for over 10 years were channelled to the Consolidated Fund and none of it was allocated for the development of Sri Lanka’s ports and airports.
Officials from Sri Lanka Ports Authority (SLPA) and Airport and Aviation Services (Sri Lanka) Ltd. overlooking the development and maintenance of the country’s ports and airports, respectively, told The Sunday Morning Business, on condition of anonymity, that they had not received any funds via the PAL over the past 10 years.
Officials from both bodies also claimed to be unaware as to what the funds were utilised for.
However, when contacted at the time, an official from the Ministry of Finance stated that nothing dictates that the PAL funds must be utilised for port and airport development and that it has been allocated to implement various budget proposals over the years.
The official also claimed that only a “few millions” had been accumulated by it since its introduction and that the amount collected in total over these 10 years was not available.
The PAL was introduced effective 1 January 2009 under Section 2 of the Finance Act No. 11 of 2002 and was payable on all imported articles at the initial rate of 1% of CIF (cost, insurance, and freight) value with exemptions for selected articles.
According to Sri Lanka Customs, PAL is calculated based on the Cost, Insurance, and Freight (CIF) value of the articles.
The Finance Act No. 11 of 2002 says that funds raised are transferred to the Consolidated Fund, making its utilisation vague. The Consolidated Fund is a fund which is not allocated by law for specific purposes.
With effect from 1 January 2016, the rate of PAL increased from 5% to 7.5%.
To encourage spending by tourists, the PAL rate reduced from 5% to 2.5% on certain electronic and electrical items.
Under the Extraordinary Gazette Notification No. 2125/64 published by the Minister of Finance, PAL was reduced to 2.5% with effect from 1 June 2019.
In the Budget 2019, PAL was said to be removed on the importation of Lucerne (alfalfa) meal and pellets while it was said to be reduced from 7.5% to 2.5% on a number of high-tech machinery and equipment items classified under HS Codes.