Jan 20, 2012 (LBO) – Sri Lanka’s decision to raise taxes on exports in raw form and reduce those for raw material imports is to encourage local manufacture and value addition, Minister of Industry and Commerce Rishad Bathiudeen said. The island intends to make it more expensive to export rubber, timber and minerals in raw form and has removed taxes on imports of raw materials to reduce the apparel export industry’s costs, he told parliament.
The encouragement of value added industry will lead to more investment opportunities to establish new industries and increase export earnings, Bathiudeen said during a debate in parliament on the new law for cesses or taxes.
The cess imposed on certain exports have been revised with the objective of discouraging export of these items in raw form and encourage value added exports,” he said.
The new law stipulates the imposition of export cesses on natural minerals like graphite, clay, ilmenite, rutile, titanium, and zirconium as well as increases of export cess raw rubber, phosphate, granite, mica and timber logs.
A commerce ministry statement said that to reduce manufacturing costs, import taxes on several raw materials used by apparel exporters have also been removed.