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E-registry for companies planned

15 Aug 2020

  • Request to be submitted this month
  • Aimed at increasing formal sector
By Uwin Lugoda The Department of Census and Statistics (DCS) plans to submit a proposal for the launch of an e-registry portal, which would serve as a comprehensive registry of all registered and unregistered businesses in Sri Lanka, before the end of this month. Speaking to The Sunday Morning Business, DCS Director General Dr. I.R. Bandara revealed that they are set to submit a proposal to the Cabinet and have discussions with the Secretary of the Ministry of Finance, before moving forward with the launch. “We do not have a set date for the launch yet. We have to first get approval from the Cabinet and proceed to discuss all the details with the Ministry Secretary.” The need for this portal came about due to a large number of businesses operating unregistered, thereby failing to be captured under DCS surveys. The portal is expected to help formalise the economy and provide more accurate data to be used in economic indicators. The plans to formalise the informal sector via an online platform were initially revealed to us by Dr. Bandara in February of 2020. “Only private liable businesses register their businesses at the Department of the Registrar of Companies (DRC), and only the businesses that exceed a certain turnover limit register their businesses at the Inland Revenue Department (IRD). Businesses that do not come under these categories remain unregistered, and that is a concern for us,” Dr. Bandara said at the time. This portal will be launched under the Ministry of Finance, while the Industry Division of the DCS is set to overlook its functions. Dr. Bandara stated that this was mainly to attract the unregistered businesses in the country, and is expected to formalise the country’s economy. She explained that businesses currently have a multitude of ways to register, and despite this, there are a large number of businesses that still belong to the informal sector. The portal is also expected to enable the DCS to produce far more accurate economic data than it does at present. It would also necessitate all unregistered or informal sector businesses to get registered, and conditions with regard to compulsory compliance will also be issued. Following the establishment of the portal, the DCS will have access to updated and current-time information of all businesses in the country, be it registered through the DRC, IRD, or any provincial secretariat, which would make it much easier for the Department to capture statistics more accurately. “We will have access to different variables including the production of businesses. Even though we are getting it through the DRC at the moment, the process is complicated and time-consuming. Sometimes, by the time we get the registration information of a business, the business would even be closed down,” she further noted. According to Dr. Bandara, the new portal will be beneficial for informal businesses in terms of legal aspects as there would be ways to identify these businesses and compensate them in case of a natural disaster such as the tsunami. A study carried out by the DCS in 2013, which is the latest study conducted, indicates that out of one million businesses identified in the country during the year 2013, 96.5% are informal businesses. The DCS believes this percentage has not come down significantly in the years that followed. According to the International Labour Organisation (ILO), almost two-thirds of total employment in Sri Lanka is informal. The ILO suggests that regulations and procedures relating to enterprises may need to be simplified and incentives such as credit be offered so that it would encourage informal enterprises to seek legal recognition. Business registration in Sri Lanka has been a lethargic, costly, and time-consuming process, and several initiatives have been taken by Sri Lankan authorities to address this issue over the past several years with limited success.

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