Paint Manufacturers welcome Cess imposition

The Paint Manufacturers Association of Sri Lanka (PMASL) commended President Mahinda Rajapaksa for imposing a cess of Rs 75/- per kg on foreign paint imports.

This initiative follows the Paint Manufacturers' appeal to the President, to consider withdrawal of the 5% tax levied on paints at the previous budget of November 2006.

Imposition of the cess will protect local paint manufacturers from low priced inferior paint products that circumvent local statutory levies, which now flood the market and make the prices of local paint products uncompetitive.

The Government also stands to benefit from the cess, since a more competitive local industry would boost government coffers substantially.

"This is an excellent piece of legislation, and a very positive step towards protecting the Sri Lankan industry and jobs.

It reflects progressive thinking and shows strong decision-making on a critical issue, and confirms President Mahinda Rajapaksa's pledge under the Mahinda Chinthanaya, to nurture local industries.

By doing this, the President has also paved the way for the local mineral industry to grow. Local industries can now compete on a more level playing field and face the challenges of international market competition. President of the Paint Manufacturers Association of Sri Lanka, Mohammed Mizver said.

The local paint industry still labours under the weight of the excise tax, which is over and above the 15% tax imposed on paint raw material imports, a situation that has resulted in the industry experiencing negative growth this year.

"The construction industry and those who feed it, like the paint industry, are the backbone of a developing economy.

The fact that we have to pay excise duty on top of customs duties on paint raw materials places a heavy burden on us local paint manufacturers, since escalating overheads compel price increases. Very often, spending money on painting is the last step in the construction process, at a time when there is very little money left over, so the end user too pays a heavy price," Mizver said.

The Sri Lankan paint industry comprises about 30 large and small players, between 15 and 20 of whom are well-known, with brands that have a strong market presence.

The Paint Manufacturers Association of Sri Lanka comprises eight of the industry's key players, namely, CIC Paints, Macksons Paints Lanka, Causeway Paints, Masons Mixtures, Lankem Ceylon, Asian Paints Lanka, Paints & General Industries and Silicone Coatings.