Nov 04, 2011 (LBO) – Savings made by Sri Lankan banks after tax cuts that government ordered be set aside for investments could be used to revive the ailing tea industry, a top exporter has suggested. Government support is needed in long-term financing and regulatory changes to “re-align” the traditional tea sector and help it regain competitiveness, said Malik Fernando, Director Operations of the MJF Group, owners of the Dilmah brand.
For financing, Fernando suggests a model similar to India™s ˜Special Purpose Tea Fund™ for replanting, infilling and rejuvenation aged tea bushes.
“A similar program can be offered in Sri Lanka to all growers, both companies and smallholders,” he said in a statement.
“The export levy on bulk tea introduced last year can fund part of this cost. Banks investment funds from VAT savings can also be channelled for such activities.”
The government’s budget last year cut value added tax for banks that were meant to go to a special fund to be used for investment in selected sectors. It also raised a tax on bulk tea exports to discourage bulk shipments and encourage value addition.
Out of Sri Lanka™s total 220,000 hectares of tea around 5,000 h