Japanese-Govt. Reps. In Talks On Investor Issues

Japanese authorities in Colombo and the Government have begun discussions to iron out problems faced by Japanese investors here, officials said.

Among the problems identified were Sri Lanka’s “complex” tax system, delay in v.a.t. refunds, rigid labour laws, unannounced power cuts in e.p.z. zones, the B.o.I. not being the “one stop” shop it once was and ad hoc holidays.

Three rounds of discussions in this regard have been held so far, with the latest taking place last month with no time frame fixed for the next meeting.

Masahide Sakishige (34), Resident Representative J.E.T.R.O. Colombo, one of the organs representing the Japanese side in these talks said that as a result of these discussions, steps were being taken to expedite v.a.t. refunds, while the Labour Department together with the B.o.I. have come up with a draft labour contract, which may assist Japanese companies to get over the problem of labour issues in future recruitments.

Meanwhile C.E.B is building a sub station in the Katunayake e.p.z. to resolve the issue of erratic power supply to that zone which hurts production.

“However the  matter of the B.o.I. not being a ‘one stop’ shop was taken-up only at the last meeting, so a resolution to that problem is yet to be found,” said Sakishige.  Some of the biting problems in this regard were the fact that the B.o.I. being unable to resolve problems pertaining to tax/I.R.D. and Customs issues, with those problems being referred to the respective departments for a solution, he said.

“Those days B.o.I. was powerful, it functioned as a ‘one stop’ service window, but recently, tax and customs issues are being referred to those departments,” said Sakishige.
B.o.I. is aware of this problem, he said.

J.E.T.R.O. had also recently written to the B.o.I. on the complicated tax structure here, and had been assured of a speedy solution.

However the ‘law and order” situation has not cropped-up at these discussions, he said.
According to statistics supplied to J.E.T.R.O.  by the Japanese Commerce & Industry Association (J.C.I.A.), around 50 Japanese companies  are operating in Sri Lanka at the present, and as per 2008 data, Japan was Sri Lanka’s 10th largest investor vis-a-vis B.o.I. approvals received, with approvals for projects worth Rs. 4.2 billion having had being got.

J.E.T.R.O. acts as the Secretariat to J.C.I.A.

Japanese investments cover areas such as ceramics, electronics, energy and shipping.
Japanese investments which were on the retreat during the war, have however been reinvigorated with the war end, with J.E.T.R.O. currently receiving inquiries from prospective Japanese investors, said Sakishige.

He said that Sri Lanka being in the centre of the east-west route, coupled with its proximity to the Indian and Pakistani markets and its skilled labour, makes it an attractive place for investments.

Unaware of S.L

A number of Japanese are unaware of Sri Lanka and of its current developments, a Japanese official said.

Masahide Sakishige, Resident Representative J.E.T.R.O. Colombo, said that around September-October of last year when one of his mother’s friends wanted to visit Sri Lanka, the travel agent in Japan advised not to travel to the island due to the security situation, when in fact the war with the L.T.T.E. was over four months earlier, in May.
Sakishige was posted to Colombo in April of last year.

When he told his mother that he was going to Sri Lanka, she was unaware of that name, as she knew the country only by its former name Ceylon. This was so even with an aunt of his.

Sakishige said that the island, after the war, has potential to be promoted to the Japanese market as a tourist destination. “While Maldives attracts 40,000 Japanese tourists annually, Sri Lanka attracts only a quarter of that number,” he said.