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Illegal interference by foreigners in local gem business; Parliamentary committee urges Govt. to take action
View(s):A Parliamentary Oversight Committee has recommended the Government to curb illegal interference by foreigners in the gem industry. This is particularly in regard to Chinese nationals who come to Sri Lanka and engage in business activities.
In its report titled “Tax policies for Development of Gem and Jewellery sector,” the Sectoral Oversight Committee on Environment, Natural Resources and Sustainable Development observed that during the past few years, “Chinese businessmen have been buying gemstones in Sri Lanka at a low price in Ratnapura, Beruwala and Ginthota, carrying them to other countries and selling them at a high price.”
The committee headed by Parliamentarian Ajith Mannapperuma also said foreign buyers, including Chinese buyers, who used “illegal money” were also evading paying relevant government taxes since their transactions were in cash, over registered exporters who dealt with bank cheques for payments of more than Rs 500,000 for taxation purposes.
“When registered businesspeople go to make transactions by cheques, they are reluctant to sell gems. This has hampered the business position of registered gem businesses and jewellers,” the committee said.
The committee also recommended removing the 2.5 per cent Social Security Tax for imported gems on value, which came into effect from April onwards. This was because associations told the committee that those involved in the industry could not gain much profit by importing gems, enhancing their value and re-exporting them.
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