Removal of import cess will harm local enterprises: Opposition

By Yohan Perera
The removal of import cess with effect from April this year will harm local enterprises, as reduced prices of imported goods will flood the local market, the Opposition alleged.
“Cess is actually a tool used to protect local goods. Imported goods could storm into the Sri Lankan market pushing the local goods out. The competition which the Sri Lankan goods will have to face will be an unfair one as imported goods will have an advantage,” former Minister Professor G. L. Peiris told a media briefing.
He said around 10,000 business enterprises will have to close down if the cess removal is implemented.
“US President Donald Trump imposed para tariffs last year for certain goods which are imported to his country from many other nations. The para tariff was made 100 percent for some countries. This was done to protect goods which are manufactured in US. It is a known fact that there is a free trade agreement between Sri Lanka and India. Sri Lanka exports 7 million pieces of apparel to India with tax-free status. However, Sri Lanka will have to pay taxes if more than 7 million pieces of apparel are exported. These arrangements are in place so that Indian apparel will also have a fair share of the market,” the Professor said.
Former Minister Lasantha Alagiyawanna said all governments that ruled the nation after 1977 maintained some kind of protectionism even with the open economy. “This government has decided to remove cess for 2,600 goods within a period of four years. This will cost about 500,000 jobs. Sri Lanka will lose Rs. 260 million in revenue as a result of this move by the government.”