The Chamber of Young Lankan Entrepreneurs (COYLE) hailed the initiatives taken by President and the government, to contain the COVID-19 virus and manage the situation in a profound manner.
COYLE in a statement adds that they unanimously agree that the highest priority and attention should be to secure the people and the society. ”We have evaluated the impact on many economic sectors with the intention of adapting to the current situation to restore the economy and social standards and wish to forward crucial factors to be considered.”
The following recommendations are forwarded by COYLE Chairman, Chamath Kottage and the Committee.
“Financial and tax moratorium relief programs that would help regain and revive the economy for small, medium, large and extra-large enterprises: It is imperative that all Sri Lankan enterprises irrespective of turnover are included and not left out of the financial moratorium reliefs.”
Reduce the interest rate to 4% for all types of working capital loans for a period of 2 years with effect from 01st March 2020. Bank charges and penal interest should be waived off or refunded if accumulated on or after March 1. “The present regulations on export proceeds with DP and DA terms may experience delayed remitting proceeds. Therefore Export proceeds should be extended to six months.”
“Thin capitalization provisions applicable under section 18 of the Inland Revenue act should be removed with retrospective effect from January 1, 2019 and thereafter. This is not bearable in the present situation and companies cannot survive without borrowing at present context or pay taxes for the past excess borrowings.
It is not practical to dis-allow a portion of interest and impose Income Tax on such expenditure incurred by a person.”
“We also suggest to reduce AWPLR to 7%% for next two years to develop the production-based economy and this will benefit government borrowing and moratoriums as well. Lending interest rates should be AWPLR +1.5% maximum.”
“Overdue loan interest must be limited to maximum of AWPLR + 3%. Guarantees and bond charges must be maintained at maximum 1.5% per Annum. LC commissions must be maintained at maximum of 0.125% per quarter. All potential legal actions and default actions resulting from the predicament should, at present, be held over for the next two years to find a resolution.”
Additional working capital and term loans should be provided to local production, exports and export-supported services.
COYLE suggests that re-establish state-owned development banks and venture capital companies to enhance and bring back the focus on SME and develop entrepreneurship. “Credit cards dues to be converted to a loan at very low interest to be paid back across a 2 year period.
Housing loans, Vehicle loans to be restructured with a grace period of 12 months.”
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