July 21, 2010 (LBO) - Exporters of finished rubber goods from Sri Lanka wants the government to lift a levy on their exports amid high raw material prices that was affecting their competiveness, an industry official said.
The 'cess' of four rupees a kilogram that is charged on finished rubber goods is expected to be used to give subsidies to growers.
"At the moment profits of growers have increased because rubber prices have increased steeply," Ananda Caldera, a senior rubber industry executive and a past president of an association representing rubber manufacturers in the island said.
"The growers no longer need subsidies. But the taxes are making it difficult for us to compete in international markets. We are going to request the plantations industry ministry to lift this cess."
Caldera said makers of rubber tyres and other goods were finding that cost of production in Sri Lanka were higher than other countries due to the cess.
He said finished rubber goods producers could export 60 billion rupees a year.
He said the demand for tyres which had slumped amid a global economic downturn was now improving and raw rubber prices are likely to go up further.
Sri Lanka's central bank, which keeps a tight peg with the US dollar has appreciated the rupee again to around 113 rupees a US dollar in recent weeks. Meanwhile Sri Lanka is also expected to lose tax benefits for export to the EU region from August.
(lankabusinessonline.com)
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