Oct 04, 2007 (LBO) – Sri Lanka has slapped a new tax on rubber products to raise funds for rubber sector development officials said, amid industry protests that cash from an existing levy was not being ploughed back to the sector. Since then however, natural rubber prices have more than doubled, making the sector an attractive investment especially with high prices seen continuing owing to strong demand and high oil prices which make synthetic rubber more expensive.
The funds raised from the four-rupee per kilo cess on all rubber based products, based on rubber content, would be used to expand cultivation, modernise factories and support small holders growing rubber, Plantations Industries Ministry officials said.
The government is strapped for cash and is trying to raise funds with taxes on sectors which are doing well ahead of its annual budget which is to be presented to parliament in November.
The new rubber tax comes at a time the tea industry has been complaining that funds raised from a tax on tea exports were not being properly ploughed back into the sector.
The imposition of the new tax has been pending for the last two years but was delayed owing to opposition from manufacturers of rubber products wh