Sharing his frank and objective assessment, Mobius said Sri Lanka needs foreign investment, both at direct and portfolio level and at the same time the private sector needs to increase its investments and activities as well. “To ensure both happen in a dynamic setting, tax policy must be favourable,” he added.
In that context, Mobius opined that the retrospective taxation must be avoided and regretted the imposition of Super Gains Tax (SGT) by the new Government. “I understand listed companies have expressed concern hence such taxation has an impact on investors too,” he said adding, “We or any investor will be worried about unpredictable and retrospective taxation.”
When told by Daily FT that one-off taxes such as SGT were to fund the stimulus announced as part of Presidential election pledge, Mobius said Sri Lanka needs to look at how some successful Asian nations managed the challenge. “These Asian countries pursued a policy of alleviating poverty by generating jobs, for which you need more business investments and economic activity. This is a more healthy and productive cycle,” he added.
The 78-year old Mobius, who joined Templeton in 1987 and currently directs the Templeton research team which is based in 18 global emerging markets offices, and manages emerging markets portfolios, said that lower rate of taxation will lead to less evasion. These, along with widening of the net, are two critical measures to boost revenue and best practice in taxation.
- See more at: http://www.ft.lk/article/491569/Mark-Mobius-shares-his-mantra-for-Sri-Lanka#sthash.7JzMuQ3h.dpuf