Exporters told to apply for the 5% export rebate

The Export Development Board (EDB) said this week that exporters can now apply for the 5% export rebate, under the government’s stimulus package. “The 5% rebate is applicable to all export sectors. You can apply within 45 days after the end of the first quarter. The first quarter for this year ended March 31. So you can apply within 45 days,” said the Director Marketing, EDB, Ms Ranjini Tudugala, at a discussion on the stimulus package at the Ceylon Chamber of Commerce on Friday.

To qualify for the 5% export rebate companies have to show the same level of employment as the third quarter of last year and must show 90% of foreign exchange earnings as the same comparable quarter, last year. Companies also need to maintain value additions.

Factories however, say they cannot meet the export earnings criteria. The tea sector for instance, said as much as 90% of their factories will not be able to meet the 90% earning requirement because of the drastic drop in output in the first quarter of this year. The ceramic sector also said they cannot meet the 90% export income requirement.

The Finance Ministry however, said it would be flexible in evaluating applications. “We will evaluate applications on a case by case basis. We can consider export earnings that are lower than 90% of last year but it can’t be very low either,” said the Director General of Fiscal Policy, Ministry of Finance, S R Attygalle.

The Finance Ministry said bank lending rates are on the way down, as state banks like the Bank of Ceylon, People’s Bank and the National Savings Bank, have agreed to reduce rates. Private banks are expected to follow.

The Treasury has also requested banks to consider relaxing the Non Performing Loan (NPL) criteria. “Generally if loans are not serviced in three months, those companies are listed as NPL’s. So we have asked whether this three month period can be extended to about six months,” said Mr Attygalle. At this point all companies benefit from the removal of a surcharge on electricity since January this year and the Finance Ministry said that other procedural aspects of the government’s stimulus package will be fast tracked.