Sri Lanka’s current policies were years in the making – Godahewa
ECONOMYNEXT – The new government’s policies were formulated years before implementation says Nalaka Godahewa, Key Advisor to the Government and former Chairman of the Securities Commission.
“When our leader of Viyathmaga, President Gotabaya Rajapaksa was appointed, the policies we developed over the years became national policy,” Godahewa said at an investment forum organized by Sri Lanka Malaysia Business Council (SLMBC).
“For 4 years a group of professionals discussed what the economic policy of the future government should be, but at that time it was not with the intention of us running the country,” he said.
“Being in the opposition gave us a chance to sit back and analyze what went wrong and why we weren’t developing at the rate we should be.”
As a result, the government brought in sweeping tax cuts in a move to spur economic activity, he went on to say.
“What we promised as tax cuts we have given and yet some of the benefits have not being realized, so we are working on that too,” said Godahewa.
Sri Lanka unified and reduced the Value Added Tax (VAT) of 15 percent and Nation Building Tax (NBT) of 2 percent to 8 percent, construction tax was reduced from 28 percent to 14 percent and telecommunication levy was reduced to 25 percent
All taxes imposed on remittance made by ex-pat workers to be removed, VAT on condominium properties removed and tax on places of worship too were removed.
“Our economic direction is pretty simple, it focuses on four cornerstones; complete eradication of poverty, equal opportunities to all, clean and efficient government and protecting our local companies,” said Godahewa.
He said that the new government needs to protect Sri Lankan companies because we cannot compete with foreign entities as “all the other countries have come to a certain (higher) level of development.”
Godahewa said the previous government was focused on political suppression rather than political development.
In a 2020-2025 policy framework, the new administration has said it aims for a deficit or less than 4 percent of GDP and economic growth of 6.5 percent. This year the deficit is expected to reach 7.0 percent of GDP.
In President Rajapaksa’s election manifesto he outlined 10 Key Policies; Priority for national security, Friendly and non-aligned foreign policy, an administration free from corruption, a New Constitution that fulfils the people’s wishes, Productive Citizenry and a vibrant Human resource, People-Centric Economic Development, Technology-Based Society, Development of Physical Resources, Sustainable Environmental Management and a disciplined law-abiding and values-based society.(Colombo/Jan29/2020)