Investment-in-Sri-Lanka

“Don’t overtax corporate sector” : First Capital CEO – Daily News

First Capital Equities CEO Jaliya Wijeratne, in a recent interview with Daily News Business, said Sri Lankan policymakers should come out with some strong and permanent economic policies soon.

“Currently there are some uncertainties with regard to corporate tax, capital gains tax and several other such areas.”

He said that the government needs taxes and it is also a social obligation of the corporate sector to pay them. “However the corporate sector should not be overtaxed.”

Wijeratne said that it would be a good idea for the government to widen the tax net and rope in several sectors that are currently enjoying a tax-free regime.

He said that due to this both local and foreign investors are adopting a wait-and-see policy and this is not good for the future of the country.

Commenting on the stock market, he said that after a lull, signs are that it would move upward. “If you take John Keells shares, it has moved up from around Rs. 130 to over Rs. 160. We also observe an increase in foreign inflows.”

He said Sri Lanka needs more listed companies and the government can move in this regard and ask some of the public entities to be listed.

“If state banks like the People’s Bank, Bank of Ceylon and National Savings Bank, along with Sri Lanka Insurance, lists even 15 percent it would be great for the stock market.”

He said that there was talk about SriLankan Catering being listed; however it still seems to be confined to discussions.

Wijeratne feels Sri Lanka should go ahead with the lease agreements with China and India for the Hambantota Harbor, Mattala International Airport, Trincomalee Port and other loss-making ventures.

He said that the funds raised from these leases should be diverted to debt repayments, which is now emerging as a major issue.

The First Capital CEO, however, said that Sri Lanka should retain a share or control when leasing out these projects and look at terms favorable for the country.

Commenting on the real estate sector, Wijeratne said that he feels it is not a bubble and demand would continue.

“With Sri Lanka’s population increasing and economy growing, the demand for land would increase. This would help to keep the demand active and aggressive for the apartment segment as well.”