The ceramics industry has banded together to urge the government to revise a recently increased tax on LPG gas which the Sri Lanka Ceramics Council says is destroying business. At a media briefing this past week, Council President D. Warnakulasooriya said gas prices in Sri Lanka have increased despite a reduction in world prices. He said their customers are now demanding that prices be reduced to fall in line with the global scenario.
Chairman and Managing Director of Dankotuwa Porcelain Ltd Sunil Wijesinha said the industry is in a crisis due to this newly imposed excise duty on gas. Prices were increased by Rs.8 per kg with effect from 31 December 2008 and gazzetted, causing further burden to an industry already in difficulty. Despite assurances by the government that the tax would be removed, it was further increased to Rs.27.50 per kg on 28 February 2009.
Mr. Wijesinha said the industry wants to support the government’s expectation of preserving employment but said policymakers might be unaware of the burden the tax increase has caused to the industry. “We realize the government needs taxes in the current scenario,” he said. However, being a small sector, they have now appealed to the media to get the message across.
Mr. Wijesinha said buyers are demanding a reduction in prices and the Sri Lankan industry is finding it difficult to compete. Companies have reduced production but are still paying an additional Rs.32 million per month for 1.1 million kilos of gas. He said diesel prices have also not declined in line with the global decrease. The appreciating rupee, particularly against the Euro and the pound is causing added problems. He said this was an effort by the industry, not to criticize the government, but to make them aware of the huge burden the industry is facing.
Managing Director and Deputy Chairman of Noritake Lanka Porcelain (Pvt) Ltd K. Nakanishi said the government has no money and has to make up for it but the industry wants normal pricing.
Managing Director of Royal Fernwood Porcelain Ltd Jagath Peiris said the ceramics industry is facing competition from several Asian countries and the additional taxes are making survival difficult. Large amounts of capital are needed to form companies. Fernwood borrowed Rs.1.2 billion on long term loans and the company is finding it difficult to get enough turnover to service their loans. |
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