Sri Lanka’s gem and jewellery industrialists are to be provided with tax relief with a view to harnessing the maximum export potential of US$1 billion for the country. President Gotabaya Rajapaksa has directed relevant officials to remove the 14% income tax levied on profits earned by the gem and jewellery manufacturers and the 15% import tax on gold.
This directive has been issued by the President in response to a request made by Sri Lanka’s gem and jewellery industrialists to withdraw the 5 to 24 per cent tax imposed on their income under the new Inland Revenue Act (IRD) claiming that the current tax burden was unbearable for small scale direct and indirect exporters earning much needed foreign exchange for the country.
The industry which has the potential of bringing over US$ 1 billion into the country would collapse as a result of the heavy tax burden imposed on them, an official of the Sri Lanka Gem and Jewellery Association said.
He noted that the association has submitted an appeal to the President and the Finance Minister to provide some relief for them as the small gem exporters and licensed traders selling gems and jewellery to tourists will have to close down their business.
The withdrawal of the tax exemption given to them since 1979 was highly unjustifiable, he said adding that the 15 per cent tax on gold imports will be another blow against the industry.
The income tax concession given to the gem and jewellery industry from 1971 was removed from the income tax policy introduced in 2017.
This created a situation where the actual income earned from the export of gems and jewellery was not disclosed, stated the President's Media Division.
“In 2018, a 15% tax was imposed on gold imports. These taxes have led to a rise in jewellery prices. Relevant taxes should be removed immediately and steps should be taken for the betterment of the gem and jewellery industry,” the President said.
The President made this observation at a discussion held at the Presidential Secretariat on Monday (07) regarding the upcoming plans of the State Ministry of Gems and Jewellery related Industries.