• Finance Min. faces pushback over high input taxes impacting local competitiveness
• Agriculture Min. advocates tax concessions amid manufacturers’ struggles
• Revenue targets take precedence over tax relief proposals: Treasury

Despite continued demands by local manufacturers for tax relief on their inputs and proposals made by the Ministry of Industries with regard to the same, the Ministry of Finance claims that it will not be possible to grant any tax concessions at this stage due to the need to meet revenue targets. 

Speaking to The Sunday Morning Business, Ministry of Industries Sectoral Development Division Additional Secretary I.C. Pathiraja confirmed that numerous complaints had been received from local manufacturers that the increase in taxes on their inputs had severely hampered their competitiveness against cheaper imported alternatives in the market.

Commenting further, he stated that the Ministry of Agriculture and Plantation Industries had forwarded the requests made by local manufacturers and submitted proposals to the Ministry of Finance to consider the grant of tax concessions to local manufacturers.

“We have had numerous discussions on this subject. It is the Ministry of Finance that has to address this. We have continuously made submissions on how local industries have fallen,” he said.

However, speaking to The Sunday Morning Business, Treasury Deputy Secretary R.M.P. Rathnayake stated that it was highly unlikely that they would be able to grant any tax concessions in the near term due to a need to meet revenue targets. 

He further pointed out that such a step would require it to be submitted to Parliament in order to amend the relevant act, which was also unlikely.

However, Rathnayake said: “Going forward, we can think about it once we achieve the revenue targets we have envisaged.” 

Accordingly, he claimed tax concessions for local manufacturers could be considered in the mid-term, provided revenue generation from certain sources exceeded their current forecasts.