Sri Lanka revises import license fee for tea re-exports
ECONOMYNEXT – Sri Lanka has cut an import license fee of 1.0 percent of imports valued with freight charged on flavoured and non-flavoured tea, and replaced it with a 1,000 rupee fee, according to a government notice.
The import license fee is issued by gazette using the powers of the Import and Export Control At of 1969.
The import control law and licensing is a key piece of legislation that promotes corruption, with licenses being used to give privileges to some importers. The abolition of the import control law can bring substantial freedoms to citizens, liberty advocates say.
The 1960s, when the law was brought, was a turbulent time in the global economy as the US Federal Reserve got embroiled in a series of monetary and fiscal mis-steps that were transmitted through the Bretton Woods soft-peg systen and evenually led to its collapse in 1971-73.
Sri Lanka and the world was buffeted by high import prices as the US printed money to fight the Vietnam war, and gold and commodity and oil prices shot up.
At the time, the administration of Prime Minsiter Dudley Senanayake was also deficit spending to finance the so-called ‘Green Revolution’ as food prices went up.
The budget deficit expanded from 588 million rupees in 1967 to 686 million rupees in 1968 and 769 million rupees in 1969.
In 1968, ‘economic growth’ soared to 8.2 percent, and Sri Lanka’s foreign reserves collapsed from $55 million in 1967 to $40.0 million in 1969. (Colombo/Oct09/2017).