FTZMA meets BOI Chairman and DG

The Free Trade Zone Manufacturers Association (FTZMA) Executive Committee members, led by Chairman Dhammika Fernando, met Board of Investment (BOI) Chairman Dr. Sulakshana Jayawardena and Director General Renuka Weerakoon, to discuss several urgent matters affecting the BOI enterprises and export-oriented manufacturers.

A key focus of the meeting was the concern faced by the local suppliers, indirect exporters/deemed exporters regarding the 18 percent value-added tax (VAT) payable on raw material purchases from such suppliers. 

The FTZMA highlighted that imposing VAT on locally sourced production inputs used for exports creates an unfair cash-flow burden, weakens export competitiveness, increases net foreign exchange outflows and places the export manufacturers at a disadvantage. 

The FTZMA strongly emphasised the need for a practical mechanism to extend the VAT exemptions, zero-rating facilities, to both indirect and local suppliers when supplying to the exporters. 

The delegation also discussed several other important operational and policy matters, including the proposed establishment of two fuel sheds in KEPZ and BEPZ, disparity in diesel pricing for the industrial sector between CPC and LIOC, proposed transfer of BOI import/export services functions to Sri Lanka Customs and matters relating to the Economic Transformation Act.

“We are pleased and relieved to inform the members that Sri Lanka Customs will not be taking over the import/export services functions currently handled by the BOI. The present BOI-led arrangement will continue and the status quo will be maintained.

In the meantime, a new set of verification officers is expected to be recruited, while Sri Lanka Customs will monitor the BOI imports and exports through a back-office mechanism, without disrupting the current operational process followed by the BOI enterprises,” an FTZMA statement stated. 

The FTZMA, along with the BOI, is to further engage with the Power and Energy Ministry to discuss on the fuel pricing, etc.

With Dr. Jayawardena, the FTZMA raised the issue of vacancies for zone directors in several BOI zones. 

“We were informed that the advertisement process is already underway to recruit a new executive director – zones, fill the vacant zone director positions and recruit staff for over 100 vacancies across various departments of the BOI,” the stamen further revealed. 

Overall, the meeting was constructive and encouraging. 

The FTZMA will continue its close engagement with the BOI and other relevant authorities to safeguard export competitiveness, ensure operational continuity and address the practical concerns faced by the BOI enterprises.