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Friday, July 02, 2010 - 5.50 GMT |
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Import tax reduction, important step for tax
simplification - CCC |
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The Ceylon Chamber of Commerce applauds the Government's initiative to reduce import taxes and it recognizes this as a first step in the simplification of the taxation system.
The Government has announced several changes to the import tax regime with effect from the 1 June 2010. These include the reduction in the number of tariff bands, reduction in import duties, removal of the 15% surcharge on import duty and removal of taxes such as the VAT and Cess on some of the items.
The Chamber also calls upon its members and the private sector to take advantage of the measures introduced by the Government and enhance investments in value adding sectors to take the country to a higher growth path.
The removal of import duty on raw materials and plant and machinery is well-timed. When the country is at a new economic juncture poising itself for accelerated growth, the reduction in duty on plant and machinery will be a further encouragement for investment. Rather than providing tax incentives and distorting the tax system the Chamber sees this as a positive step to promote investments, stated the Ceylon Chamber of Commerce.
It also said similarly the reduction in raw materials will benefit the local industries. Once again instead of imposing additional taxes to protect domestic industries, removal of tariffs on raw materials will reduce cost of production for domestic industries and enhance their competitiveness.
Reduction in import duty on motor vehicles and on some of the consumer durables have been strongly advocated by these sectors. Lower prices will help consumers to access better quality goods.
Besides lower taxes will also reduce unethical practices such as smuggling and under-invoicing which also deprive the Government of its legitimate revenue. It is reported that the Government is also working towards providing antidumping legislation, labeling legislation, prescription of quality standards etc to improve the environment for domestic industries which are necessary to ensure the quality of goods available for local consumption and production.
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