Oct 24, 2014 (economynext) – The Sri Lankan government has lowered taxes for the sugar industry and increased the farmgate price for cane as part of efforts to revive sugar plantations.
Its 2015 budget proposes to increase the farmgate price of sugar cane to Rs. 4,500 per Metric Tonne from the present average of Rs. 4,000/MT to provide greater incentives to around 25,000 small farmers involved in sugar cultivation in the Uva and Eastern Provinces.
A concessionary tax rate of 12% applicable to the agricultural sector will be extended to the local sugar industry, President Mahinda Rajapaksa, who is also finance minister, told parliament when presenting the budget on October 24. Previously, sugar industry profits were liable to tax at the standard rate of 28%.
The budget also allocates Rs. 5,000 million to build modern sugar manufacturing plants at Kantale, Hugurana and Pelawatta and develop smallholder plantation under Sri Lanka Sugar Company during 2015-16.
The government is trying to revive sugar plantations which had been neglected after being handed over to private firms and used largely to make raw material for manufacturing liquor, Rajapaksa said. They were taken back by the government in 2012.