Thursday, January 14, 2016

Does the Finance Minister understand how much confusion he has caused?

The increase in the NBT, PAL and the new variable VAT rates were supposed to take effect on 1st January or so the Govt. notified businesses. Accordingly businesses had to change their software, and billing systems to take account of these changes, and of course increased costs to many and most of all to the ultimate consumer.

Some are in the throes of increasing retail prices, to reflect additional costs etc. and hey presto, suddenly yesterday, we were informed that these changes have not taken effect yet!!! Apparently until Parliament passes the necessary legislation to effect the changes or so they put it as an excuse.

It is obvious even the Finance Minister who masquerades as a Businessmen clearly has not understood how inconvenienced let alone problems this will cause. People, especially companies that are spending millions and even importers to have to pay PAL, and NBT in large amounts will be hankering to get refunds for overpayments in these two weeks! Will they be able to get it, and if so how soon. These are all factors, those who seem to rule have NO CLUE about, and actually don’t seem to care.

It is this kind of attitude that results in businesses losing confidence in the Govt. to get anything right. A private business has many challenges, as they have to compete with others for business, so the more uncertainty that persists, forecasting, and pricing becomes difficult, let alone having any idea of profitability where thin margins are the rule in a tight market.

Clearly, those in Parliament don’t seem to understand any of this, or if they do, don’t seem to care. This attitude does not bode well for attracting Foreign Investment if they realize what kind of step-motherly treatment is given to the Private Sector which is the engine of this democracy and the Public Sector the unquestionable drag on growth of the SL economy.

It is becoming obvious that economic illiteracy amongst even the likes of Ravi Karunanayake, who is supposed above all to be an accountant, is far below needed levels, and it is therefore clear as daylight that people more in tune with common sense and logic are represented in Parliament, and if this kind of mess in the budget is anything to go by, is a sack able offence, and a good enough reason for replacing him, as seems to be the general consensus today.

Not only has the Govt. lost credibility in rolling back the Budget proposals drastically, it seems to have nullified all revenue raising provisions, and kept all revenue losing proposals in tact. What does this mean to the already ballooning deficit? An EXPLODING DEFICIT NO DOUBT!    

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