Sri Lanka to raise export taxes on bulk tea, rubber exports

Nov 22, 2010 (LBO) - The Sri Lankan government plans to raise taxes on exports of bulk tea and raw rubber in penalizing producers and restricting their market access in a bid to support value added production, the budget for 2011 said.



President Mahinda Rajapaksa told parliament during his budget speech that the island has been able to diversify export products and markets but that value addition was not enough.

"I propose to impose a cess on all exports in raw and semi processed form to encourage value added exports from Sri Lanka," he said.

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Only exports of finished goods will be free from the cess.

"The tea sector must move forward with very high value added exports with Sri Lankan brands.

Therefore, I propose to increase the export cess on bulk tea to 10 rupees per kilo."

Rajapaksa said 35 percent of the raw rubber production is still exported as a primary commodity.

"To encourage value added exports, I propose to increase the cess on the export of raw rubber from four rupees a kilo to eight rupees.

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Rajapaksa said most exports of tea, garments, leather, rubber, gem and jewellery products, several valuable spices as well as many raw materials are without sufficient value addition.

The export ta