Rewards scheme from 1 Oct. to boost exports

• Large-scale exporters with annual export turnover of over Rs. 750 m will be paid 2% of additional export earnings earned between 1 October and 31 March 2021
• SMEs will get 3.5% 
• Scheme expected to generate an additional export income of $ 600 m 
• Game-changer for SL exporters, says EDB Chief

In a bid to commend exporters and the resilience shown by them during an unprecedented COVID-19 pandemic, the Export Development Board (EDB) of the Ministry of Trade has proposed an export stimulus reward scheme from 1 October to 31 March next year. 

The proposed Export Development Reward Scheme (EDRS) of the EDB was presented by Trade Minister, to the Export Development Council of Ministers’ (EDCM) first meeting last week Chaired by President, Gotabaya Rajapaksa.

The key objective of the scheme is to encourage exporters who managed the risk and the vulnerabilities despite the current global economic crisis, to increase their volume of exports in future to be further encouraged by rewarding their achievements. 

The proposed scheme will be operative under two categories covering SMEs and large exporters for consecutive two quarters starting from 1 October based on the export performance of the exporters. The quantum of reward will be calculated based on the incremental export turnover of the particular quarter compared to the value earned year ago. 

Large scale exporters with an annual export turnover of over Rs. 750 million will be paid 2% of the additional export earnings earned during the relevant period with respect to the corresponding period of previous year, while SMEs will get 3.5% of the additional export earnings earned during the relevant period with respect to the corresponding period of previous year. 

The implementation of this scheme is expected to generate an additional export income of $ 600 million during the period of 1 October and 31 March 2021.

“This is a game changer for our exporters, as the rewards will help the exporters immensely and help Sri Lanka by increasing our foreign income,” EDB Chairman Prabhash Subasinghe said.

Although the Government is doing its utmost to alleviate the hardships faced by exporters, they have been adversely hit by the cancellation of orders and declining product demands. However, the exporters are diversifying their production lines by grabbing the global new emerging opportunities due to the COVID 19, while some other companies are diversifying markets to avoid the uncertainties. Such positive changes can make a progressive difference in the country’s export earnings. 

EDB is of the view that in spite of the difficulties due to the global economic downturn, the positive contribution made by the exporters to the Sri Lankan economy be appreciated. This proposed Rewards Scheme will encourage export industries to secure existing markets, penetrate new markets, establish and promote backward linkages, diversify into new products according to the existing demand created through COVID-19. 

“Now it’s time for exporters to plan out their future export plans to get rewards. Due to the adverse effect of COVID-19 felt by the supply chains of the dominant export sectors of Sri Lanka, maintaining the export earnings that have been achieved in the previous year will be doubtful. In such a situation, the proposed scheme will encourage exporters to make progress beyond the export performance achieved last year,” EDB said. 

It is expected that the EDRS will help the export sector to improve its competitiveness which provides a timely incentive for companies which have demonstrated their commitment and competence by bringing in large volumes of foreign exchange, while increasing value addition and diversifying products and markets.  

The EDRS will be in operation soon and a formal announcement shall be made by the EDB shortly.