Lanka exporters ask: Was tax on imports removed to allow free trade?
View(s):Was the removal of cess (tax) on imported goods part of a policy to allow free trade? This is a question raised by Sri Lankan exporters concerned about the impact on local enterprises after the Government this week announced lifting the cess on some imported goods.
A cess or tax is essentially meant to protect local enterprises.
These concerns were raised through the National Chamber of Exporters of Sri Lanka (NCE) which represents over 600 export oriented enterprises across all product sectors and services
The chamber said it was concerned as the move to remove cess on imported products appeared to be part of policy reforms related to free trade. “The chamber is concerned that in spite of assurances given at various times by the Prime Minister and the relevant subject Ministers, the private sector will be consulted before making any significant policy changes, the purported move to remove cess across the board on imported products, will have severe adverse consequences on local enterprises in many sectors, which need a certain amount of protection for their sustainability and growth,” the chamber said in a media statement.
In this context, the chamber said it was strongly of the view that an opportunity should be provided for the various heads of export sectors represented in the chamber to assess the implications of such a move on local enterprises in their particular sectors, and “make suggestions regarding remedial measures before any action is taken to remove the cess on imported products which would have a direct consequence on local products.”
It said: “It is understood there is a similar suggestion to remove the ‘Export Cess’ imposed currently on exports of certain basic raw materials, which encourages value addition domestically.”
The chamber urged concerned state authorities to defer any moves to remove the existing cess on imported products, as well as the Export Cess imposed on the export of certain raw materials without proper consultations with the private sector.
| Impact on reduced taxes | |
| The special commodity levy on imported rice, which was earlier Rs. 5 per kg, has been further reduced to 0.25 cents on Tuesday and will be in force till December to tackle the rice shortage in the country owing to drought. The Special Commodity Levy (SCL) on imported fresh fish has been slashed by Rs. 50 as well and will be valid for the next three months. On Tuesday the Finance Ministry removed all taxes on maize imports and instead imposed a SCL of Rs. 10 on each kilo of maize. The cess per kg on imported flour has been reduced by Rs 10 to Rs. 15. Import tax on wheat grain has also been reduced from Rs. 9 to Rs. 6. The reduction of those taxes will deprive the state of Rs.50 billion in revenue. |