Sri Lanka tea exporters protest sudden tax

Jan 30, 2013 (LBO) - Sri Lanka's tea exporters are protesting an export tax that they have found has come into effect from January 23, where a cess on bulk tea exports is estimated to have almost doubled. "A large number of tea export containers were held up following a sudden revision of the tea export cess for bulk teas which had apparently come in to force through a gazette notification dated 23rd January 2013," Tea Exporters Association of Sri Lanka said in a statement.

"The revised levy unfairly thrust upon the tea export sector is Rs 10/- per kilogram or 5% on the preceding week's Colombo auction elevational average for the particular grade of tea being shipped."

"The Tea Exporters' Association strongly objects to this sudden revision of the tea cess payable for bulk tea (flavoured & unflavoured) as it is in effect an increase since the Colombo tea price averages have been in the region of Rs 380/- to 420/- per kilogram in the last many weeks."

"Therefore, the applicable cess for most bulk tea shipments based on the new definition is approximately double of the cess currently paid."

Export taxes eventually penalize the producer as they get the world price, less the export cess.