The canned fish factory which was planned to be opened in the Oluvil Harbour with an investment of Rs 150 million and machinery valued at over Rs 70 million, is at a standstill, Sri Lanka Canned Fish Manufacturers Association (SLCFMA) President Shiran Fernando said. This is in the backdrop of an influx of imported canned fish with a mere Rs 200 cess per kilo and sans the 18% VAT.
Sixteen local factories producing canned fish have stopped production and if no quick solution is found by the Government for their grievances the entire local canned fish industry which saves the country over Euro 80 million annually will be destroyed. He said the fishing season is going will begin soon but the members of the association were not in a position to purchase the fish harvest since their factories have been closed. This will lead to a catastrophe with fishermen unable to sell their catch jeopardising the livelihood of over one million people.
He said despite making several submissions to authorities requesting a level playing field, no measures have been taken to increase the special commodity levy (SCL) on imported canned fish from Rs 200 to Rs 500 and to charge 18% VAT on all imported canned fish that have flooded the local market recently. He said while a border tax of Rs 200 is put on one kilo of imported canned fish, an additional tax of 18% has been slapped on local canned fish which increases the price by Rs 125. That amounts to Rs 400 on a local kilo of canned fish, which is a 20% price increase on a local canned fish tin compared to an imported canned fish tin. He queried as to how to compete with foreign canned fish when the price of local canned fish has been increased by 20% and no VAT imposed on imported canned fish
“We are an import substitution industry and if we did not start manufacturing canned fish in this country, Sri Lanka would have been spending Euro 80 million annually to import canned fish. But we were able to stop that. Now again it’s going to go back to the old ways. Ten years of hard work is gone. Every container of imported goods is a container of unemployment for our people,” Fernando said.