The government is planning to offer a subsidy to international garment buyers to make up for any loss if Sri Lanka is unable to secure the GSP Plus concessions, high ranking government officials said.
At a recent discussion with garment manufacturers, senior government officials said this would be offered to the garment industry and other sectors if the EU facility is not available next year.
The EU-GSP Plus is currently under negotiation with the government which has refused to accede to any investigation on the international human rights conventions that it was expected to implement under the earlier tax-free facility.
“We will provide the difference (as a subsidy) between the earlier price and the new price (including taxes). That means if a buyer has to pay an extra Rs 10 per piece (if taxes are imposed), we will reimburse this amount,” one official said, adding that this was being worked out as a fall-back option if Sri Lanka fails in the bid to secure this extension.
The government has said the tax free beneift (for all products utilising) is worth $150 million annually, and under the proposed plan this amount will be set aside in the budget. A team of four ministers have been appointed by the President to work out ways of obtaining the facility. Discussions are still continuing with the EU.x |
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