Government trawls back on increased tea export cess
View(s):The Sri Lankan Government, facing a barrage of complaints from the tea industry, this week did an about-turn on a controversial decision to increase the tea export cess.
The increased cess was introduced a week back by the Treasury through a gazette notification without any consultation not only with the trade but also the Ministry of Plantations and the Sri Lanka Tea Board.
The unilateral decision drew a chorus of protests from the trade and criticism from the media, including the Business Times which ran a stinging editorial lambasting the move.
On Wednesday, the Planters Association (PA) thanked the Minister of Plantation Industries Mahinda Samarasinghe for his intervention in bringing about an equitable resolution both in terms of the quantum of cess and the methodology in computing it.
PA Chairman Lalith Obeyesekere said the President, having understood the serious repercussions of an increase of over 100 per cent in the prevailing cess, directed the relevant gazette to be amended ‘so as not to cast any further burdens on this vital industry whose long term sustainability is of significant importance to the country’. In a strong editorial titled “Tea crisis brewing”, the Business Times said Sri Lanka’s tea sector was aghast over a sudden decision to increase the tea export cess by 100 per cent from January 23.
“This is not the first time that the Treasury bigwigs have enforced taxes and levies without proper consultation. Thus, this is not new and is, somewhat, a common feature when it comes to an exchequer that is scraping the barrel for funds and looks at the most lucrative, money-spinning sectors to increase state revenue. Makes life easy for the Treasury mandarins!”
The editorial said, “This is a classic case of killing the goose that laid the golden egg; Greed is taking over rationality in the decision-making process of the Government. Faced with empty coffers, the Treasury looks at sectors that contribute the most to taxes and then dip into these sectors for more money. It’s a one-way street.” It said once again the government has bungled the decision-making process which, among other things, lacks governance, accountability and transparency and most of all; common sense.
Mr Obeyesekere noted that any future regulatory or fiscal changes should be made in consultation with the line ministry, the Sri Lanka Tea Board and the industry stakeholder associations.
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