Cess to be utilized for tea industry development

COLOMBO: The cess levied on tea exports will be fully utilised for the development of the tea industry in future, Plantation Industries Minister D. M. Jayaratne said.

Addressing meetings organised in Gampola to felicitate him as Plantation Industries Minister, Jayaratne said the cess levied on tea exports totalled Rs. 1,200 million annually. This money was being credited to the Treasury and the Treasury in turn released Rs. 1,000 million out of it for development of the tea industry.

He hopeds to obtain the balance Rs. 200 million too from the Treasury for the development of the industry in future.

Jayaratne said the funds so obtained would be utilised to introduce new cultivations, put up more tea factories, modernising the tea smallholders sector and tea based research.

His Ministry was now in the process of formulating a ten year plan for the development of the tea industry and a Cabinet memorandum for obtaining the balance cess funds would be submitted soon.

He said the cess on tea, coconut and rubber exports are levied in terms of the Tea Board, Coconut Development and Rubber Control Acts.

They are then credited to the accounts of the respective cultivations and then diverted to the Treasury through a single account. The funds derived from cess are utilised for the maintenance of the respective industries.

The main items include administration of institutes, payment of salaries of office staff and development work.

Curtailment of capital expenditure has slowed the rate of growth in the industry.

Jayaratne said 90 per cent of the additional Rs. 1.50 levied on cess through legislation in 2006 can be utilised for capital expenditure and the balance 10 percent can be used for administrative purposes.

Accordingly an additional income of Rs. 450 million is expected from the tea industry.