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03 November, 2015 09:28 AM Source: Financial Times - Sri Lanka
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“We have had satisfactory returns on our investments to date but Sri Lanka has the potential to offer more and attract much larger investment and we would like to enhance our involvement,” said Mobius during the interview along with Marianne Page, the famous Lankan fund manager and consultant to CT CLSA Securities Ltd., of CT Holdings Plc.
Templeton continues to hold on to Government Bonds it invested in two years ago and scouting for more equity investments, both listed and private, as returns are attractive and on the positive outlook arising from the change of Government, improved profile for the economy and expectations of a progressive Budget.
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.

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