TEA says Budget 2019 “below expectation” of tea exporters
The Tea Exporters Association (TEA) yesterday said the proposals in Budget 2019 were “somewhat below the expectations of tea exporters”.
“The reduction of the Economic Service Charge from 0.50 percent to 0.25 percent would certainly benefit the exporters, as it would ease the cash flow issue to some extent.
The reduction of the Port and Airport Levy (PAL) from 7.5 percent to 2.5 percent for import of machinery and spare parts under HS codes 84 and 85 will also benefit the tea processing companies.
However, these measures are inadequate to address the high cost of operation for exporters, emanating from other taxes and regulatory controls,” the TEA said in a statement.
The TEA however welcomed the proposal to expedite the GI status for Ceylon Cinnamon in the European Union, saying that it would benefit Ceylon Tea GI as well.
“However, it is necessary to expedite the legislation for local registration of GI, which has been pending for some years to facilitate the local GI registration that will eliminate any barriers for international registration,” the TEA noted.
Meanwhile, acknowledging the government’s commitment to promote exports, the TEA said the allocation of Rs.400 million for the export market access programme under the National Export Strategy (NES) and further allocation of Rs.250 million for the implementation of the NES appear to be insufficient.
“Further, consistent policies and regulations are necessary for the growth of the export industry.”
The association also commended the plans to fast track the FTA with India, China and Thailand and also the proposal to amend the labour laws to engage more women in the workforce, saying that they are steps in the right direction to support business.
“The government has recognized that the knowledge-driven skilled persons are key to economic growth in the future.
The proposal to launch scholarships for educational excellence to facilitate undergraduate education at internationally recognized prestige universities is a novel idea.
This will certainly build up a team of young experts with knowledge and exposure, who could contribute immensely for the development of the country,” the TEA said.
The industry association also welcomed the ‘Home Sweet Home’ scheme to provide concessionary housing loans for middle-income youth as having their own house will be a real incentive to begin their life.
Although the TEA viewed the incentives and grants announced targeting the young entrepreneurs and government servants as timely, the association warned that any expenditure on non-productive areas could trigger inflation and increase domestic debt levels.