Duty free boat imports to be halted

Introducing a much sought-after measure of relief to Sri Lanka's boating industry, the country will now introduce tax on boat imports that are duty free.

"The duty free boat imports were allowed by the Government in the aftermath of the tsunami to re-build the fishing industry. But this has now adversely affected the overall boating industry since many vessels, including sub-standard boats, are imported duty free,dealing a blow to our $ 500m boating industry's competitive advantage.

After giving a hearing to representatives of the boating industry, I and my officials have decided to introduce taxes on boat imports from 2013 so that the emerging sector can forge ahead", said Minister of Industry and Commerce, Rishad Bathiudeen.

"With the consultation of the Ministry of Finance, my officials will start formulating the relevant proposals targeting the 2013 Budget" Minister Bathiudeen said.

The Boat Show Sri Lanka was held in 2008 drawing more than 8000 local and international visitors.

According to the organisers Boat Building Technology Improvement Institute Lanka (GTE) Ltd (BTI) and the exhibition organiser, Lanka Exhibition and Conference Services (Pvt) Ltd, Boat Show 2012 is South Asia's most focused and largest international boat exhibition.

A large number of boating industry players and buyers and boating enthusiasts and industry professionals from different countries such as India, Pakistan, Maldives, Bangladesh, Singapore, South Korea, China,Germany, Netherlands, UK, USA among others, are scheduled to take part in this international event. Also on display were the Navy's commercial boating ventures.

Minister Bathiudeen said "Our international reputation for boat- building has been confirmed recently when Seychelles recorded that Sri Lanka was its boat-building hub. This has been conveyed to us by Foreign Minister of Seychelles, Jean Paul Adams when he visited in April. This global recognition is a sign of the potential of our boat -building industry. Boat-building in Sri Lanka is an emerging export sector that continues to expand due to the variety of products and services it is capable of offering to international markets and its total annual production value now exceeds $500m. This includes boating industry services as well.

There are around 25 active boat yards around Sri Lanka, producing various types of boats and about seven boatyards export their products. The best-known sail makers of the world, North Sails, is operating in the Biyagama Investment Promotion Zone.

The export value of boats manufactured in Sri Lanka doubled in 2009 to $58m from $22m in 2008.

In 2010, the value of boat exports was $59m and in 2011 it has reached $ 149m a 149 percent increase and which I believe is a very promising growth rate for any industry in the country" Minister Bathiudeen said. The Minister said that with the expansion in economy, specifically the tourism industry, have also resulted in renewed interest in boating, specially the leisure and pleasure boating sector.

I am glad to record that my Ministry is willing to support marina development through the institutional mechanism of the Ministry.

My Ministry, with industry participation has already set up an advisory committee on boat- building and has obtained allocation from the Treasury, to conduct a feasibility study on setting up a boat park.

The 2012 Budget has provided the much-needed relief to the export production sector and I am happy to note that our boating industry also can reap these benefits."