Treasury rejects publicly the appeal of footwear and leather product manufacturers

Sri Lanka footwear and leather products manufacturers have been asked to venture into export market making high quality up market shoes without asking tax concessions from the Treasury as the government is ready to extend necessary assistance for manufacturers turning out value added products for the export market without focusing only for the local market.

This directive was issued by Treasury Secretary Dr. P. B. Jayasundera in response to a question raised by a member of Sri Lanka Footwear & Leather Products Manufacturers Association at the question and answer session of the post budget seminar held at the Nelum Pokuna Theatre hall in Colombo this week.

He appealed to the Treasury Secretary to re- introduce the previous duty structure of 30 per cent import duty on CIF value or Rs. 1000 per pair whichever is higher.

Rejecting this industry appeal for the third time, Dr. Jayasundera said school children and office workers and others are wearing cheap imported shoes, and local manufacturers have failed to meet the demand. The apparel industry has become a high foreign exchange earning industry by improving quality and adding value to readymade garments despite losing the GSP + facility, he said adding that footwear manufacturers should follow this path.

Sri Lankan exporters have been provided with port, airport, customs and better infrastructure facilities and what they should do now is to produce high quality value added products for the export market and not ask for tax concessions from budgets, he told industrialists. He said that he has already asked the association to submit a proposal to make the industry more export oriented.

The association representative told him that they have already submitted the proposal but there was no response from the Treasury.

Footwear and several other goods are imported without paying legitimate duty and dumped into the market and selling less than Rs. 500 when the minimum duty is Rs. 500. All the invoices are under invoiced and most goods imported are stock lots, association President, P.G Nimalasiri said.

He noted that manufacturers are struggling to survive and already one of their members had committed suicide as the benefit never goes to low end products and also there was a minimum protection of Duty +CESS+VAT –Rs. 700.

The industry at present employs about 20,000 people directly and indirectly and includes 10 large export companies, 30 medium scale companies and about 3000 small- scale manufacturers.