Sri Lanka plantations demand delayed tax refunds as wages rise

L to R: Samantha Ranatunga, Chairman, HVA Foods PLC; Jan Müggenburg, Chief Executive Officer, Müggenburg Group; Graham Stork, Chief Executive Officer, HVA Foods PLC; Sarva Ameresekere, Group Chairman, George Steuart & Co. Ltd.

Sept 21, 2009 (LBO) - Sri Lanka's plantations industry is demanding that the government settle long-delayed tax refunds to help bear the cost of a wage hike estimated at an extra six billion rupees a year.
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Damitha Perera, chairman of the Planters' Association, which represents the industry, said repayment of value-added tax refunds and disbursement of funds raised from a tax on exports would help the firms bear the burden of the wage hike.
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The wage hike of around 40 percent agreed with labour unions last week will cost each regional plantations company an additional 250-450 million rupees a year, depending on the size of the workforce.

"This is a drastic impact on each company's cash flow," Perera told the annual meeting of the association.

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Plantations firms agreed to raise a worker's daily wage to 405 rupees from 290 after lengthy talks with labour unions which resorted to disrupting transport of made tea from hill country estates to the Colombo auctions.
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The stoppage of tea deliveries and disruption of other work on estates created fears of a shortage at the auctions, and drove up prices, already buoyant owing to a global production shortfall caused by drought.

"We request the go

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