Sri Lanka govt pledges more funds from tea export tax

Chandi Dharmaratne

June 17, 2010 (LBO) – Sri Lanka’s new plantations industries minister has promised to give the tea industry more of the funds collected from a tax on tea exports. Sri Lanka tea exporters have warned that the government’s failure to allocate cess funds collected from tea exports for brand building was eroding their competitiveness as rival origins step up marketing efforts.

The funds were previously monitored and money disbursed by a committee of officials from government and the tea trade.

But in recent years the cash-strapped government changed the rules, dismantling the committee and sending the funds to the general government treasury. Mahinda Samarasinghe said his plantations industries ministry was having talks with the government treasury on ways to plough back into the tea industry a bigger share of the funds collected from the tax.

The industry has repeatedly complained it is starved of funds raised from an export tax of four rupees a kilo on tea shipments.

The funds were meant to help with replanting, factory modernization and promotion of tea in export markets.

Sri Lanka exports about 300 million kilos of tea annually but in rec