A Parliament Oversight Committee has recommended the government to regulate illegal interference in the Gem business by foreigners- particularly Chinese nationals who come and engage in business activities in the country.
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 very low price in Ratnapura, Beruwala and Ginthota areas and carrying them to other countries and sell them at a very high price,"
The Committee headed by MP Ajith Mannapperuma also pointed out that foreign buyers including Chinese buyers who use “illegal money" are also evading paying relevant government tax since all of their transactions are in cash over registered exporters who deal with bank cheques for payments above Rs 500,000 for taxation purposes.
"When registered businessmen go to make transactions by cheques, they are reluctant to sell gem and this has hampered the business position of registered gem and jewellers," the Committee stressed.
The Committee also recommended removing the Social Security Tax of 2.5 per cent which came into effect from April onwards for imported gems on value, since associations made representations to the Committee that those involved in the business cannot gain much profit by importing gems and enhancing their value and re-exporting them.
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