3 November 2023 08:21 am Views - 1375
The escalating cost of operations in the country is making Sri Lanka an unappealing destination for doing business, where now convincing investors to look at the island nation is a fresh challenge, the minister in charge of investment promotions said.
A key factor that stands as a major hurdle in drawing investors is the escalating power tariff, which underwent a third upward revision just weeks ago, State Minister Investment Promotions Dilum Amunugama said.aa
The decision by the Public Utilities Commission of Sri Lanka, sent shockwaves to all sections of the business community, as the expanding operational costs make local products and services less competitive in the international market.
"With the power tariff, I am on the same footing as you are. It is eating into our exporters. Day by day, with the escalating costs, it is making our job more difficult to bring investors. But we are also fighting to hold on to the investors who are already here, Amunugama told a full-house audience present at the 23rd Exporters’ Forum yesterday.
He noted that retaining investors will remain a difficult task until Sri Lanka manages to maintain the utility charges at reasonable levels.
Another area of concern for investors, according to Amunugama, is also the taxes, which, just like the utilities, are being increased.
The government has announced plans to introduce new taxes and increase the rates of existing ones to meet revenue targets set by the International Monetary Fund (IMF) so that the island nation can unlock the bailout package installments.
The government this week announced plans to increase the value-added tax (VAT) to 18 percent from 15 percent, which will come into effect from January 2024.
Amunugama stressed that if Sri Lanka is to bring in and retain investors, policy changes would be imperative.
“We don’t know when the changes are going to be done. But we are looking forward to a lot of improvements in 2024. President Ranil Wickremesinghe is also confident of that,” he said.