Gem and Jewellery sector raises concerns on recent tax structure
Buyers at one stall. Pic by M.A. Pushpa Kumara
While Sri Lanka’s gem and jewellery export earnings reached US$ 200 million and approximately $200 million from diamond exports last year, the industry is aiming to reach $1 billion in exports in 2023.
The industry is also concerned about the 30 per cent income tax on exports which will be effective from 1 April this year.
Sri Lanka Gem and Jewellery Association Chairman, Ajward Deen told the Business Times that the government should reconsider its recent stance of eliminating incentives and imposing exorbitant income taxes and rolling out problematic regulations.
Mr. Deen made these remarks on the sidelines of the FACETS Gem and Jewellery exhibition held at the Cinnamon Grand Hotel in Colombo last week.
He said, “As a key foreign exchange earner in Sri Lanka, the government must not ignore the gem and jewellery industry, nor burden it with challenges that are routinely faced by the industry’s various stakeholders.”
“The Government in its capacity must be a facilitator towards the future prosperity of this industry which is often plagued by unnecessary and discouraging bureaucracies which hinder its growth. The success of any industry relies upon the incentives it creates for its stakeholders and the government should reconsider its recent stance towards eliminating much of these incentives, be they through imposing exorbitant income taxes or rolling out new regulations,” Mr. Deen added.
Minister of Industries and Plantations, Ramesh Pathirana at the launch of the exhibition highlighted that Sri Lanka’s gem and jewellery sectors said the history of this industry dates back to many decades.
“Sri Lanka is ready to open up its business to the whole world by boosting the export sector. In 2022 the gem and jewellery alone earned $200 million from exports while diamond exports fetched to $200 million which accumulated to $400 million. The industry has the potential to reach US$ 1 billion within a short period of time. For this to happen we should have exhibitions of this nature and we should have more collaboration between the government and the private sector,” noted Mr. Pathirana.
According to a media release around 100 buyers from over 20 countries attended the FACETS exhibition this year which drew more than 5000 visitors. The exhibition itself this year made sales and orders of over $10 million within the three days. Industry experts cited the event as one of the most successful exhibition in its 30-year history since the first FACETS show.
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