The Sri Lanka Apparel Exporters Association (SLAEA) has urged the Sri Lankan Government to abolish the Simplified Suspended Value Added Tax (SVAT) scheme or exempt the apparel industry from the tax.
According to SLAEA, recent figures pertaining to FDI were not great partly due to the fact that the ease of doing business in the country was bad as exporters indulged in more bank borrowings in the short term. It may be noted that the apparel exporters were previously exempted from Value Added Tax.
Though the country could no longer depend on the apparel exports industry as countries like Bangladesh which had cheaper labour were more competitive in the apparel export sector and market, it could on the other hand capitalize on being internationally recognized in terms of quality and delivery, as per Felix Fernando, Chiarman, SLAEA. He emphasized that the labour would have to be trimmed down by 20 per cent.
“In terms of products and styles, it is advisable for us to make more and more value additions. Factories may close, yet more revenue must be earned from the limited number of factory complexes. Hong Kong has the hub concept. Sri Lanka too can be a sourcing hub as the buyers have recognized the open market. Elsewhere, there must be definite modernization and industrialization in terms of technology and machinery. Capital allowances can be invested in it. The incorporation of new technologies will result in efficiency, help existing workers be more productive and break the monotonous nature of their jobs,” underlined Fernando.