Feb 06, Colombo: The Marxist party of Sri Lanka Janatha Vimukthi Peramuna (JVP) has pointed out that increasing the cess on export of tea by 100% has a drastic effect on the tea industry and urged the immediate withdrawal of the increase in the cess.
Colombo District JVP parliamentarian Sunil Handunnetti, in a statement, has said that the government has increased the cess on tea through a gazette notification on January 23rd jeopardizes the tea trade.
He has pointed out that the Rs. 10 cess imposed on a kilo of tea would increase the cess to Rs.22 under the new scheme.
He has observed that only Rs.4 was charged as cess before 2010 and increasing it to Rs.22 within two years is an unreasonable move.
According to Handunnetti, the government earns about Rs.4 billion as taxes from the tea industry, which could be the largest tax recovered by the state for any product.
He has added that the new cess for tea has been imposed by the government without even informing the Tea Board or the Tea Exporters Association.
According to cess policy, the funds collected through a cess of a certain industry should be used for its benefit, but so far it has not been used for the development of the industry, Handunnetti pointed out.
The JVP MP warned that there is a risk of the demand for 'Ceylon Tea' in the world market to drop due to high prices as taxes levied for tea and to the increase in the production cost.