Cess on soles, heels and leather to be lifted

By Sureka Galagoda

Minister of Export Development and International Trade Prof. G. L. Peiris has directed Treasury Secretary to remove the cess imposed on soles and heels as well as PVC and PU leather cloth.

Prof Peiris said that after listening to representations made by the footwear industry he decided to remove the Rs 25 per pair cess imposed on soles and heels and the Rs 50 per kilo cess imposed on PVC and PU leather cloth.

These were recommendations made in the 2008 budget and the gazette notification removing the cess will be issued immediately, he said addressing the opening ceremony of the first ever Sri Lanka Footwear and Leather Fair 2007 at the BMICH yesterday.

Prof. Peiris said that at present they are negotiating with EU to extend the GSP plus scheme up to 2011. We signed it in 2005 and as per the present conditions it will lapse in 2008. He said that the EU extended the scheme to our country due to the meritorious performance of our factories where we don't employ any kind of child labour. Even the well-known author Thomas Friedman had sent his daughter to work as a supervisor at a garment factory in Sri Lanka for six months.

He said that at present the country exports about 20-30 million pairs of shoes and supplies to well known brands such as Clarke, Marks & Spencer, Bata France Browns and Next. The value addition is about 40-50% and last year we earned about US$ 39 million from export of leather goods and footwear.

Industrial Development Minister Kumara Welgama said that the Industrial Development Ministry together with the Footwear Design and Development Institute (FDDI) India has taken steps to establish a training centre for people engaged in the footwear industry. In addition we are also planning to set up footwear production villages and 1000 mini factories around the country funded by the Lankaputhra Development Bank.

Minister Welgama said that the footwear industry, which has been identified as a thrust industry, is planning to achieve an export turnover of US$1.5 billion and employ 100,000 persons.

Chairman Organising committee Nimal Samarakkody said that the GSP + scheme and the recent introduction of anti dumping duties on leather based products from china and Vietnam by the EU will give further impetus to place our country in the world map of leather.

He said the government has identified the footwear and leather goods segment as one of the thrust industries as it is a low capital and high labour intensive industry, which ideally fit into the rural economy giving equal opportunities to both genders making use of locally available raw material.

Samarakkody said that they are planning to make it an annual event and the fair will conclude tomorrow (26). It has 150 stalls.