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By Chamitha Kuruppu

Local footwear importers said they are undergoing hardships and incurring heavy losses due to the tax of Rs.100 per pair on imported footwear imposed by the government.

In a move to protect local footwear manufacturers the government imposed a minimum tax of Rs.100 per pair on imported footwear in the last budget.

Secretary of the Footwear Importers' Association Sarath Pathirana told the Daily News that when all the other taxes including VAT are added to the Customs Duty, it is nearly Rs.200 which is twice the tax imposed by the government.

He said that when it comes to infants' shoes which is low in price the tax is greater than the cost and no profit could be earned.

More than 50 footwear importers of the association have called upon the Minister of Finance K.N.Choksy to remove the tax.

Pathirana said if the government is unable to remove the tax the next best option is to employ a graded tax structure to different categories of footwear. "The tax is same for infants' shoes to designer ladies shoes," said Pathirana.

He proposed that footwear imports be categorised as infants, ladies and gents as well as shoes, sandals and slippers.

" The cost of material changes from one category to another and therefore the best option is to impose different taxes based on the category," he said. Pathirana said that the association hopes to import footwear components and assemble them in Sri Lanka.

"The cost will be cheaper than importing finished products," he added. Sri Lanka imports most of the footwear at present from Thailand and China.

An official of the Ceylon National Chamber of Industries told the Daily News that their main intention is to boost the local footwear manufacturing industry.

"This is exactly what the government expected from the tax," the official said.

The income generated by footwear manufacturing in 1993 was US$ 27 million and the income was US$ 70 million in 1997.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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