Although the government has pledged to ban canned fish imports to Sri Lanka, quick urgent measures were also needed to be taken simultaneously by the authorities to prevent the total collapse of the two industries, Sri Lanka Canned Fish Manufacturers Association (SLCFMA) President Shiran Fernando cautioned addressing the media recently in Colombo.
He said by now for the period September to November almost 19 million canned fish have been imported to the country hugely jeopardizing the local canned fish and fisheries industry. Another 20-25 million canned fish tins are expected to enter the country in the next few months which will lead to the total breakdown of the local fisheries industry.
He said by giving license to import canned fish for a Special Commodity Levy (SCL) tax of just Rs 57 per tin (Rs 200 per kilo) a total non-level playing field has been created with local canned fish manufacturers having to pay 18% VAT per tin. This will increase a local canned fish tin by over Rs 125 and will take off the competitiveness of locally produced canned fish tins totally. While welcoming the decision to ban canned fish imports, Fernando urged that 18% VAT should be imposed on all imported canned fish tins now in the country.
This will also increase the revenue of the government, he said. Therefore, Fernando said the government must increase the SCL of an imported canned fish kilo from Rs 200 to Rs 500 immediately.
He also said the basis of charging tax on imported canned fish should be changed from drained weight to net weight. Currently it is charged on the drained weight as a result it is unfair for local canned fish producers as the tin, label and water come into the country duty free.
Finally, he said no directive has been issued by the Consumer Affairs Ministry, Finance Ministry or Inland Revenue Department to allow super markets to sell local canned fish above the Maximum Retail Price (MRP). As a result, they refuse to charge the VAT from the end consumer and local manufacturers have to bear the VAT cost element as well.
Fernando said quick remedial measures need to be taken without further delay to prevent a total collapse of the fisheries industry.
He cautioned that all factories under their association have stopped manufacturing canned fish and as a result they have also stopped buying fish from fishermen resulting in total chaos in the industry jeopardizing the livelihood of over two million in the fisheries industry.
Fizel Jabir