Sri Lanka tea industry starved of export refunds

Mar 09, 2010 (LBO) – Sri Lanka’s tea industry, a top foreign exchange earner, is still starved of refunds from a government tax on exports, despite rival origins expanding market share, an industry official said. A committee of government and industry officials formed to decide how to allocate the funds raised from the cess on tea exports is defunct, said Dhamitha Perera, chairman of the Planters’ Association which represents corporate tea producers.

The government has not responded to repeated appeals by the industry to distribute the funds for field development and factory modernization on tea estates and for overseas marketing as they were originally meant to.

“The cess committee is non-functional now and we’re unable to ascertain the actual receipts and distribution,” Perera told LOB in an interview. “There’s no response from the government yet.”

The government imposes a cess of four rupees a kilo on tea at the point of export, having raised it by 1.50 rupees in 2007.

The funds were partly meant to be ploughed into the tea industry to help replant estates and improve processing in factories as well as for promotion in overseas beverage markets.

But most of the money has been appropr