Sri Lanka's new plantations industries minister has promised to give the tea industry more of the funds collected from a tax on tea exports.Mahinda Samarasinghe said his plantations industries ministry was having talks with the government treasury on ways to plough back into the tea industry a bigger share of the funds collected from the tax.
The industry has repeatedly complained it is starved of funds raised from an export tax of four rupees a kilo on tea shipments.
The funds were meant to help with replanting, factory modernization and promotion of tea in export markets.
Sri Lanka exports about 300 million kilos of tea annually but in recent years the industry has received only a negligible amount of the total funds raised from the export tax known as a cess.Samarasinghe said the industry has received some of the funds but acknowledged that not enough had been given for capital expenditure.
"Some benefit has been given to the industry," he told a news conference. "But we have not been able to use 100 percent of the cess as capital expenditure. Recurrent expenditure has also been financed by the cess.
"Now we’re talking with the treasury on ploughing back more of the cess money as capital expenditure. We're also looking at alternative income generating avenues so these monies can be ploughed back for the development of the industry especially capital expenditure."
The funds were meant to help with replanting, factory modernization and promotion of tea in export markets.
Sri Lanka exports about 300 million kilos of tea annually but in recent years the industry has received only a negligible amount of the total funds raised from the export tax known as a cess.Samarasinghe said the industry has received some of the funds but acknowledged that not enough had been given for capital expenditure.
"Some benefit has been given to the industry," he told a news conference. "But we have not been able to use 100 percent of the cess as capital expenditure. Recurrent expenditure has also been financed by the cess.
"Now we’re talking with the treasury on ploughing back more of the cess money as capital expenditure. We're also looking at alternative income generating avenues so these monies can be ploughed back for the development of the industry especially capital expenditure."
Sri Lanka tea exporters have warned that the government's failure to allocate cess funds collected from tea exports for brand building was eroding their competitiveness as rival origins step up marketing efforts. The funds were previously monitored and money disbursed by a committee of officials from government and the tea trade.
But in recent years the cash-strapped government changed the rules, dismantling the committee and sending the funds to the general government treasury.
Source: Apr 17, 2010 (LBO)
But in recent years the cash-strapped government changed the rules, dismantling the committee and sending the funds to the general government treasury.
Source: Apr 17, 2010 (LBO)
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