Sri Lanka plantations demand delayed tax refunds as wages rise

Sept 21, 2009 (LBO) – Sri Lanka’s plantations industry is demanding that the government settle long-delayed tax refunds to help bear the cost of a wage hike estimated at an extra six billion rupees a year. Damitha Perera, chairman of the Planters’ Association, which represents the industry, said repayment of value-added tax refunds and disbursement of funds raised from a tax on exports would help the firms bear the burden of the wage hike.

The wage hike of around 40 percent agreed with labour unions last week will cost each regional plantations company an additional 250-450 million rupees a year, depending on the size of the workforce.

“This is a drastic impact on each company’s cash flow,” Perera told the annual meeting of the association.

Plantations firms agreed to raise a worker’s daily wage to 405 rupees from 290 after lengthy talks with labour unions which resorted to disrupting transport of made tea from hill country estates to the Colombo auctions.

The stoppage of tea deliveries and disruption of other work on estates created fears of a shortage at the auctions, and drove up prices, already buoyant owing to a global production shortfall caused by drought.

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