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14 December, 2015 09:26 AM Source: Financial Times - Sri Lanka
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The Spices and Allied Products Producers and Traders Association (SAPPTA) on Friday hailed the 2016 Budget proposal to do away with the CESS imposed on exports, but urged the Government to stick to the proposal despite some wanting it continued.

SAPPTA Founder Chairman Gulam Chatoor said that to increase the exports keeping in line with the Government policy it is important to remove the CESS as proposed, adding that it would encourage farmers to increase their production.

However, he pointed that there would be some rethinking required to decide if CESS should be removed completely or alternatively continued for value addition purposes.

“Generally, the Government supports export related products, and we are not even asking for any kind of money. We are only asking to do away with the CESS so that it would have a positive impact on production and on productivity,” he stated at a media conference yesterday.

According to the budget proposal the CESS imposed on pepper, cloves and nutmeg would be removed in order to encourage export of spices.  Currently a CESS of Rs.3 to Rs.10 per kilo is imposed on pepper, Rs.6 per on cloves and Rs.10 on nutmeg.

A SAPPTA former Chairman, M.C.M. Zarook said that the CESS fund has done nothing for the industry and funds collected over the years have been transferred into the Treasury.

Noting that  the proposal made by the Government to allocate Rs. 150 million for branding and Rs.50 million for research was praiseworthy, he questioned as to why  producers must back the CESS fund, when the Government has already allocated Rs. 150 million from the Treasury adding that they could use part of that fund for value addition.

“No other country in the world has imposed CESS on exports. In fact exports should be given incentives thereby, exports would increase and foreign exchange would increase; however in Sri Lanka CESS is imposed on a simple thing like spices,” he pointed out.

Zarook also said that Sri Lanka had not been successful in branding any of its products in the world market thus the allocated Rs.150 million should be carefully invested.

“We have to look branding in a broader perspective in order to pitch Sri Lankan spices to the top of the world,” he emphasized. 

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