* Dr. PB says SEC not proactive enough
*Previous budget concessions not had an impact
*Proposals made to lift withholding tax on corporate debt, stamp duties on margin account transfers
* Incentive mooted for companies with high free float
A fresh round of talks between the Treasury and capital market stakeholders took place yesterday (23) in view of the upcoming budget.
The meeting was chaired by Treasury Secretary Dr. P. B. Jayasundera. Top officials from the Securities and Exchange Commission and the Colombo Stock Exchange attended the meeting with representatives of the Colombo Stock Brokers Association, Unit Trust Association and Margin Providers Association in attendance.
Dr. Jayasundera said the country’s capital market needed to perform well and contribute to the economic development of the country.
He said capital formation was not satisfactory enough and that budget concessions provided over the last few years did not have much of an impact on the development of the bourse.
The Treasury Secretary called for quantifiable proposals from all stakeholders and said the SEC was not proactive enough in developing the market.
Sources said the meeting was very positive with the industry putting forward several proposals to uplift the country’s capital market.
One proposal to the government was the lifting of withholding tax on corporate debt investments. The corporate bond market is underdeveloped and the need to make this sector more vibrant so as to attract more foreign investment would be crucial for the overall development of the country’s capital market.
Transfers to an investor’s own margin account continued to be taxed (stamp duty), so the industry sought an exemption in this regard as well.
Tax concessions were also sought for companies with a high free float. A request was also made to encourage listed companies to payout decent dividends.
Dr. P. B. Jayasundera said the government would look at the practical aspects of the proposals and would act on them based on its capacity.
Brokers also sought incentives to upgrade their infrastructure, especially IT based capabilities, for which the Treasury chief had expressed his keen support, sources said.
Sources said the meeting was focused with none of the more controversial issues brought up for discussion, although there was a brief discussion on the need for brokers to disclose their personal trades after the SEC recently removed restrictions placed by the earlier administration.
source - www.island.lk
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