Two foreign buyers take a closer look at the gems on display at the FACETS 2024 exhibition at Cinnamon Grand Colombo. The exhibition concludes today

SLGJA Local Promotions Committee Chairman Rizan Nazeer (third from left) in conversation with Industries and Health Minister Dr. Ramesh Pathirana during the latter’s tour around FACETS 2024 exhibition at the Cinnamon Grand, Colombo. FACETS Sri Lanka Chairman Altaf Iqbal is on right

Chief Guest Industries and Health Minister Ramesh Pathirana

Sri Lanka Gem and jewelry Association Chairman Ajwad Deen

The gem and jewellery sector on Saturday renewed its concerns over being included under the new Value Added Tax (VAT) regime but the Government assured support to boost earnings.

The platform for celebration of the industry’s rich legacy, achievements, future potential and fresh concerns as well as pledge of policy support from the State was the opening of the three-day FACETS 2024 exhibition at the Cinnamon Grand, Colombo.

Billed as the biggest show in the 30 year history FACETS 2024 has over 100 stalls along with several pavilions that encapsulate the essence of Sri Lanka’s gem and jewellery legacy. They are the gem pavilion, premier jewellery pavilion, sustainable pavilion, sapphire masterpiece pavilion, NGJA SME pavilion, and the SLGJA pavilion, each offering a unique perspective on the exquisite gems and jewellery that Sri Lanka has to offer.

Organised by the Sri Lanka Gem and Jewellery Association (SLGJA), in collaboration with the National Gem and Jewellery Authority (NGJA) and the Export Development Board (EDB), FACETS concludes today with an estimated 8,000 trade buyers visiting.

SLGJA founder member and President Ajwad Deen said FACETS has seen a remarkable evolution in pioneering the showcase of Sri Lanka’s gem and jewellery industry and its resilience. He noted that FACETS has become the forerunner and a proud parent of a growing family of exhibitions. This was an apparent reference to the 3-day ‘Gem Sri Lanka’ trade exhibition from 11 to 13 January in Beruwala.

Getting down to industry concerns, the SLGJA Chief identified the inclusion of the gem and jewellery under VAT for the first time and that too at the highest rate of 18% as the biggest challenge.

“I wonder if we can survive this and in time we will see the fate of this industry. It threatens to undermine the remarkable strides we have made over the years, considering that 70% of all stones exported from our shores are of foreign origin,” Deen emphasised.

He said 1 in 3 exported is a foreign stone and with a value addition of 90%, such high taxes could severely disturb the intricate fabric of the gem and jewellery industry. “These myopic policies drive businesses that are already burned by high operating costs, further into the shadows of the informal sector or indeed force them to relocate to more favourable markets like Bangkok, Dubai or Singapore,” warned the SLGJA President.

He was of the view that 18% VAT goes against the Government’s stated objectives of support to enhance industry earnings to $ 2 billion from $ 500 million at present.

«Such policies could indeed jeopardise our industry’s› future growth and sustainability,» he said, adding «It is important for the Government to recognise the future potential of the gem and jewellery industry to earn significant foreign exchange. Instead of imposing heavy local tariffs, we should be learning from countries such as Thailand, Vietnam and India that support their export industries.»

The SLJGA Chief also renewed its appeal for Government support in ensuring the sustainability of the industry.

Chief Guest Industries and Health Minister Dr. Ramesh Pathirana commended the gem and jewellery industry’s resilience amid challenges and expressed hope for better success in the future influenced by the stability established by President Ranil Wickremesinghe and his plans for the country.

Responding to SLGJA Chief’s concerns on VAT, Minister Pathirana said “once bitten we are twice shy,” and recalled the crisis in 2022 and 2023 due to the reduction in taxes in 2020 followed by lower Government revenue.

“The country had a very difficult time and there was upheaval in the economic and the political arena. Yes, I know it›s a little high and nobody anticipated this kind of rise in taxes but as a policy we must ensure that the private sector pays taxes to boost Government income to look after the welfare of the people.”

Minister Pathirana assured the gem and jewellery industry of continuous consultation and relaxation of rules and regulations to enhance ease of business.  “In comparison to the past, there is a liberal and less stringent operating regime for the industry,” he said, adding that the proposal of a dedicated free trade zone for the industry is being explored.

“Be assured that whatever you may request from the Government with no parameters, we are duty bound to provide that support to the industry,” Minister Pathirana said, adding that a much higher export earnings from the gem and jewellery industry is possible.

FACETS Sri Lanka Chairman Altaf Iqbal described the event as an effective launch pad for many entrepreneurs in the past and commended the unwavering support of the NGJA, and the EDB with the Sri Lanka Tourism Promotion Bureau joining in 2024.

“FACETS is an excellent starting point for anyone seeking opportunities in the gem and jewellery sector. It plays an important role in linking various parties so that they may reap the benefit of the opportunities the local and the global markets have to offer,” Iqbal emphasised.  

It was pointed out that even though the Sri Lankan gem and jewellery industry has made commendable progress over the years it has large potential yet to be unlocked. “We at SLGJ believe that every robust policy framework from the state could help realise the potential benefit not just of the industry but the country at large,” FACETS Chairman stressed.  He urged policy makers to engage the industry and deliver a viable set of policies that would help the country earn higher foreign exchange.

“Sri Lanka is famed for its star sapphires and the skill of Sri Lanka gem cutters is unparalleled in their ability to bring out the best out of the sapphire - the convergence of the rays at a single point, creating the beautiful, innovative star.  Likewise, if all sectors of our industry and the Government unite and act in unison, we can really shoot for the stars,” emphasised Iqbal.

State Minister of Primary Industries Chamara Sampath Dasanayake, NGJA Chairman Viraj De Silva and EDB Chairman Dr. Kingsley Bernard were present at the opening along with diplomats, industry representatives and international buyers.

 

Inauguration of the 30th edition of FACETS Sri Lanka