Aug 02, 2011 (LBO) – Singer Sri Lanka, a top consumer durables retailer said profits rose 79.9 percent in the June 2011 quarter from a year earlier as sales grew rapidly after the state cut taxes on electrical home appliances. The firm reported earnings per share of 2.34 rupees for the quarter.
Revenues in the June quarter rose 37.9 percent to 5.1 billion rupees. In the half year to June revenues were also up 37 percent to 10.26 billion rupees.
“Since the selling prices of most products are lower than last year due to reduction of duties and taxes, the volume growth is even higher than the growth in the revenue,” chief executive Asoka Pieris told shareholders.
Sri Lanka’s government cut taxes on consumer durables increasing the trade liberties of citizens.
Critics says that for years Sri Lanka’s rulers had kept taxes on electrical appliances very high keeping them out of the reach of less wealthy citizens and claiming that they were ‘luxury goods’.
The taxes were partly to help import substitution rackets which were engaged in tax arbitrage instead of producing genuinely competitive goods.
Import substitution businesses profit from selling to a citizenry whose freedom to choose had been strippe