Decision to remove tax revoked to encourage value-addition
By Shabiya Ali Ahlam
Recent fears of the local spice sector with regard to export tax have been confirmed, as plans to remove the cess imposed on the industry have been revoked to encourage value addition.
Export Development Board (EDB) Chairperson and CEO Indira Malwatte yesterday said that while the Budget 2016 called for the removal of export tax on spices, the agency does not recommend it.
“Together with the Ministry of International Trade we have discouraged the proposal as the very idea of imposing a cess is for funds to be ploughed back into the industry. The removal of cess on raw materials was debated and we are firm that nothing should be sent out of the country without value addition,” affirmed Malwatte.
She added that the decision was reached with the consultation of the spice sector stakeholders.
The new EDB chief stated that the easy way of exporting spices in its raw form is discouraged and stressed the need for the stakeholders to improve productivity by getting into the production of value added products such as essential oils and perfumeries.
It was highlighted that for pepper, nutmeg, cloves and even cinnamon, there is immense potential for value addition.
“We cannot expand land, it is a limited natural resource. The only way to increase earnings is to improve our productivity with what we have, and the only way possible is to engage in value addition,” she pointed out.
While the industry has highlighted that it is the farmer who is impacted by cess as the cost is passed down the supply chain, Malwatte dismissed the argument.
“The farmer will not be affected. And by removing the cess it is not the farmer who will benefit, it is the trader. We have had this discussion with farmers as well.
In cases where the cess has been removed, the farmer has never benefitted.”
Malwatte asserted that unless the sector is pushed to move on to the next level, exporters would remain comfortable in continuing to export spices as raw materials.
“Making the move now will allow the sector to reap benefits in the future,” she stressed.
Fresh focus on exporters today
Local exporters will come under fresh spotlight today as after a four years of wait they will receive due recognition for their efforts in successfully representing the nation in the highly competitive international market. Top achievers of the export sector will be felicitated at the 21st Presidential Export Awards that will take place in Colombo this afternoon. Presenting the prestigious awards will be President Maithripala Sirisena.
The 21st edition will felicitate high flyers for the year 2011 to 2014 as the event was not held for four years straight.
Amongst the special awards will be Sri Lankan Exporter of the Year, Highest Employment Provider in Export Industry, Best Sri Lankan Brand Exporter, Highest Net Foreign Exchange Earner, Best Emerging Exporter, and Most Market Diversified Exporter.
There will also be 27 Product/Service Sector Awards to be conferred for the best exporter in each of the segment. A total of 130 awards will be presented this year.
Supreme Court Judge Hector Yapa chaired the panel of judges.
The Presidential Export Awards was formulated by the Export Development Board (EDB) in 1981 to recognize the contributions made by the export community for national development.
The awards symbolize national recognition of the individuals or enterprises excelled in export business, particularly in non-traditional product and services.