Sri Lanka slaps new levy on rubber products

The ousted Sri Lankan Prime Minister Ranil Wickremesinghe is seen during a press conference after a special parliamentary session at the Parliamentary complex, Colombo, Sri Lanka on 14 November 2018. Following a stay order issued by the Sri Lankan Supreme Court effective till 07 December 2018, Sri Lankan Parliament was reconvened on 14. Sri Lanka's Supreme Court on Tuesday (Nov 13) overruled President Maithripala Sirisena's dissolution of Parliament and ordered a halt to preparations for snap elections next year. (Photo by Tharaka Basnayaka/NurPhoto via Getty Images)

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