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The implementation of a minimum duty on footwear and used bicycles on the recommendation of Minister of Industries, Rohitha Bogollagama is a boost to local manufacturers, said Aloy R. Jayawardene, President, Sri Lanka Chamber of Small Industry.

Of late used bicycle and footwear are being imported in very large quantities. Such imported shoes can be seen in piles on the pavements and wayside roads.

Most of the footwear are production over-run, outdated designs or rejections in those large scale foreign manufacturing factories. Some of the footwear is being purchased on weight basis. Imported used bicycles are being stored and displayed on available vacant lands and sometimes on coconut estates as well. These used bicycles are imported from Japan at a very low price. In addition some of average quality bicycles and footwear are also imported.

When importing these items most of the importers never indicate the correct buying price but adopt the system of 'under invoicing' to avoid payment of duty. Therefore the government is not only losing revenue heavily but also by the free import of these items it has caused a serious threat for the local industries who are importing their raw materials under normal channels by paying the legitimate customs duty.

The serious anomaly here is the shoe components and complete shoes are being charged at the same rate of duty resulting in the local manufacture being uneconomical to import components and do assembly in their production line. In view of this not only large scale manufacturers but also small and medium manufacturers of footwear are very badly affected resulting in the closure of few large scale factories and unknown number of small scale factories.

Even bicycle manufacturers face a serious situation as the price of assembled bicycles, the importation of components is higher than the used bicycles resulting in the bicycle assemblers to close down their production units. The contribution made by small and medium manufacturers all over the island, employment has been generated. These factories are extremely viable for the economic development of the country, even developed countries such as Japan and Taiwan had given priority for the development of small and medium industries.

In addition to this developed countries adopt various ways and means to protect small and medium sectors from cheap imported products.

For eg. shoes can be imported to Japan in a limited quantity and there is a floor price. By allowing free imports the country is not benefited. There is no social benefit as well except for a handful of traders who do not contribute to solve the unemployment problem.

In a situation like this we appreciate the bold steps taken by Minister Bogollagama to safeguard the local industries. In the recent budget the following were imposed.

Introduction of a minimum of Rs. 100 duty for imported footwear; Introduction of a minimum of Rs. 500 duty for used bicycle and Reduction of 10% duty for shoe components.

There are many locally manufactured products which need similar protection from imported items and therefore we hope the government will take positive steps to extend the minimum duty scheme for other affected industries too.

We never requested the government to stop imports, we have no objection to allowing anybody to import quality products at market prices as this would enable the local manufacturers to compete with the imported products.

However traders might adopt various other means such as indicating a lesser quantity on the invoice to get off this minimum duty.

Further goods are being brought by travellers by way of baggage and we request that the basic allowance of five pairs for a passenger and over and above be charged the normal rate of duty.

However our appreciation goes to Minister Bogollagama and the other relevant authorities who took the initiative to implement the minimum duty for the benefit of the small and medium industries.

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