NCE member issues addressed at Exporters Forum

The recent Exporters Forum, organised by the Sri Lanka Export Development Board (EDB), provided a comprehensive platform for addressing the pressing challenges faced by Sri Lankan exporters. Chaired by Minister Dilum Amunugama, the forum underscored the importance of collaborative efforts in resolving sector-specific issues. The National Chamber of Exporters of Sri Lanka (NCE) praised the EDB for hosting the event, highlighting its pivotal role in facilitating dialogue between exporters and key stakeholders.

This forum was notable for the participation of representatives from Customs, the Inland Revenue Department (IRD), and other critical trade bodies, ensuring that the concerns of exporters received the necessary attention. Follow-up meetings have been planned to delve deeper into potential solutions.

Key issues highlighted

Some of the issues that was discussed during the forum on 25 July:

Delays in accession to the Madrid Protocol 

The NCE expressed frustration over the prolonged delays in Sri Lanka’s accession to the Madrid Protocol, which would simplify international trademark registration and enhance global recognition for Sri Lankan brands. Hon. Minister Amunugama assured that this matter would be thoroughly investigated, with updates to be provided in due course.

Cargo scanning and checking at the Airport Cargo Village

Concerns were raised about the manual cargo checks by the Air Force at the Airport Cargo Village, which have led to pilferage and damage, particularly affecting perishable goods and high-value apparel shipments. The NCE suggested the installation of scanners to streamline the inspection process and improve security. Air Force representatives present at the forum agreed to discuss potential solutions.

Removal of SVAT

Concerns were highlighted regarding the proposed removal of the Simplified Value Added Tax (SVAT) by April 2024. Without a proper VAT refund mechanism, the removal of SVAT could significantly impact exporters, imposing heavy burdens on their cash flow. Finance Ministry officials assured that the VAT refund mechanism is progressing, with an official system to be implemented before the removal of SVAT. However, the NCE suggested a test run of the system to identify and address any bottlenecks. The current SVAT system reduces unnecessary paperwork and manpower, and the NCE recommended its continuation. Minister Amunugama noted that the removal of SVAT is a requirement from the IMF, but he committed to discussing these concerns with the IMF team in their next meeting.

Foreign income conversion rule

Jewellery manufacturers raised issues regarding the foreign income conversion rule, which mandates conversion within 90 days, a relaxation from the previous 7-day requirement. However, the industry requested an extension to 180 days, citing the need to retain foreign currency for immediate gold purchases. This extension would offer greater flexibility and support to the sector.

Cargo space issue with Sri Lankan Airlines 

The forum also addressed the cargo space shortage with Sri Lankan Airlines, particularly affecting shipments to the Maldives. Exporters have faced last-minute offloads, risking the loss of buyers. An official from Sri Lankan Airlines acknowledged the high demand and space constraints, suggesting the use of FITSAIR and the Air Force’s commercial section as alternatives. It was proposed that the Chambers conduct a survey on shipment volumes to the Maldives to better approach FITSAIR and the Air Force.

Collaborative efforts for viable solutions

The Exporters Forum highlighted the critical role of collaborative efforts in addressing and resolving the issues faced by Sri Lankan exporters. By bringing together key stakeholders, the forum fosters a proactive approach to finding viable solutions for the export sector’s challenges. The NCE expressed its gratitude for the EDB’s efforts in organising such a productive event and looked forward to the positive outcomes from these discussions.

The commitment demonstrated by various stakeholders, including Government representatives and industry leaders, underscores a shared dedication to enhancing the export sector and supporting the growth of Sri Lankan businesses on the global stage.