Sri Lanka UNP fulfils election promise; investors should use GSP+: Harsha
ECONOMYNEXT – Sri Lanka’s apparel fisheries and rubber sectors will be able to make immediate use of GSP+ trade benefits to expand shipments to the EU but domestic and foreign investors should set up new factories, Deputy Foreign Minister Harsha de Silva said.
He said the current administration of President Maithripala Sirisena, with the UNP, SLFP and smaller parties had improved relations with all countries.
The government had already ended a fisheries export ban by the EU.
"But fisheries exports were still taxed at 18 percent," de Silva said. "From Saturday they will go duty free."
The EU is expected to publish the restoration of trade benefits by Friday.
Apparel was taxed at 9.6 percent at the moment he said.
Coconut exports are taxed at 14 percent he said.
Other products like footwear was also exempt, he said.
"We can produce, Nike, Reebok and export. Our companies like DSI can also use this opportunity to export," he said.
DSI is however a protectionist firm which has got together with elected ruling class to push up import duties and earn rents at the expense of the common people, including school children and adults.
The firm pushed for more restrictions at a recent business form at the Finance Ministry.
Sri Lanka’s apparel industry represented by the Joint Apparel Association (JAAF) was gearing itself up to expand exports, de Silva said.
"They think there will be 400 million dollar benefit and they can generate 20,000 new jobs," de Silva said.
Finance Minister Ravi Karunanayake had announced accelerated depreciation to help industries expand, he said.
Foreign investors should also invest in the country to make use of the benefits, he said.
However Sri Lanka has a problem with weak investor protection and property rights.
Sri Lanka expropriated domestic and foreign firms as late as 2011 and the current administration had so far not returned the property to the people.
The new administration also slapped punitive and retrospective taxes as well as massive one off taxes dubbed ‘revenge taxes’ which goes against the principles of taxation going back centuries, furthering scaring investors.
However last year some activists went to court and forced the administration to adhere to basic democracy and bring taxes to parliament before imposing them on a helpless population without getting ‘parliamentary consent’.
(COLOMBO, May 17, 2017)