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Sri Lanka lifts floor barrier for bonded warehouses

ECONOMYNEXT – Sri Lanka’s finance minister Mangala Samaraweera proposed to lift the requirement for a minimum 50,000 square feet (about 230 x 220 feet) to set up a private bonded warehouse, following requests from industry.

Sri Lanka has proposed the setting up of bonded warehouses in a budget proposal in 2016, but businesses had said the size should be decided by the requirements of the firm.

Minister Samaraweera had proposed that the discretion of setting the size should be given to the director general of customs. The cabinet of ministers had cleared the proposal.

It is not clear why the government or a bureaucrat should make micro level business decisions of a firm.
If thresholds requiring high costs are set for any business process or liberalization of existing controls which holds a country back, small businesses or start-ups will not be able to benefit from them.

All state regulations, licenses, controls, approvals, as well as import duties, push up costs of start-ups, stifle innovation and serve as entry barriers to prevent a country from changing its existing product or service base.

Most software start-ups happened in Sri Lanka because there were no regulations to prevent it occurring, no government licensing was needed, and private education was not regulated, allowing them to offer foreign computer course without government approval. (Colombo/Oct16/2019)