Import taxes are critical for government revenue. However, these taxes are often high and prevent businesses from becoming more efficient – businesses sometimes have to pay up to five different taxes when importing essential materials and products. The government has introduced a solution to this problem – import tax exemption schemes. Through these schemes, businesses can bypass certain taxes and save money. Yet, the solution is not as simple as it seems. The current regulatory framework in place for tax exemptions undermines the objective of such schemes – which is to prevent misuse and restrict benefits to eligible parties. Using agricultural equipment as an example, this policy note outlines how the process in place for approving exemptions is (i) opaque; (ii) discretionary; and (iii) prone to abuse.
Verité Research and the World Bank developed a methodology to monitor online proactive disclosure of information, in accordance with the RTI Act. Verité Research then used this methodology to monitor and evaluate the online proactive disclosure of information across 55 public authorities in Sri Lanka. The report found that 20% of public authorities scored in the ‘moderately satisfactory’ band. The majority, 75% of public authorities scored within the ‘moderately unsatisfactory’ band and 5% scored ‘unsatisfactory’. No authority scored ‘satisfactory’ or ‘highly satisfactory’.
Export promotion has been a key policy objective of successive governments of Sri Lanka. The Government aims to double the value of exports to USD 20 billion by 2020. Currently, the government is taking measures to improve the investment climate and ease the bureaucratic burden for the private sector; investors and businesses. One such bureaucratic hindrance is the export registration process. This policy note finds that although the current registration process was introduced with the intention of identifying and supporting new exporters, its execution severely impedes the achievement of this goal.
Sri Lanka and China decided to enter into a Free Trade Agreement (FTA) in August 2013 to further expand trade between the two countries. Technical negotiations, which officially commenced in September 2014, are still underway with five rounds of negotiations having been concluded. China is the world’s second largest economy, its largest exporter and its second largest importer. For a small market economy like Sri Lanka, an agreement with a country such as China presents exciting opportunities as well as daunting challenges. This briefing note provides an assessment of the challenges and opportunities that Sri Lanka is likely to face in operating under an FTA with China. Potential challenges and opportunities have been identified by analysing the key features of China’s existing FTAs with other countries.
The Madrid Protocol is a simplified global system for registering trademarks abroad. It eases trademark registration abroad for Sri Lankan businesses. Sri Lanka is looking to complete accession to the Madrid Protocol by the end of 2017 or early 2018. However, accession to the Madrid Protocol will not necessarily help address the related challenges faced by Sri Lankan business; the challenge of registering trademarks in Sri Lanka. Verité has conducted research on the challenges faced in the process of registering trademarks in Sri Lanka and how these challenges undermine the benefits of the proposed accession to the Madrid Protocol. This policy brief presents an analysis of these issues and provides recommendations to overcome the identified obstacles.
Sri Lanka’s exports are heavily concentrated on a few markets and a few products. The government’s recognition of export diversification as an important policy strategy to revive exports, indicates that both market and product concentration are seen as critical bottlenecks in this regard. This report compares and contrasts Sri Lanka’s export product and market concentration and its export composition against that of the world and selected Asian economies. The objective of this brief analysis is to understand where Sri Lanka stands in the world and in comparison to its neighbours that have performed well in terms of export concentration and composition.
There are several causes to the problems facing Sri Lanka’s economy. The problem of bureaucratic inefficiency exemplified by this case study: finding information about trade regulations is a significant barrier to improving the economy in agricultural products. The poor performance in the supply of even basic information indicates the larger challenge of improving the bureaucracy.