Sri Lanka's local canned fish manufacturers are facing significant challenges due to a tax policy that favors importers, according to the Sri Lanka Canned Fish Manufacturers Association (CFMA). This policy allows importers to price their products significantly lower than local manufacturers, who bear higher costs due to taxes and operational expenses. Importers benefit from a special commodity levy of Rs. 200 per kilo of fish without VAT, while local producers face income tax, VAT at 18%, and other costs, reducing their market competitiveness. The CFMA has reported this issue to authorities without a response, fearing permanent factory closures could impact the industry, its investors, and 4,000 direct employees. They are not seeking tax subsidies but an equal playing field, proposing an increase in the special commodity levy for importers to Rs. 500 per kilo to make competition fair. The CFMA emphasizes that creating a level playing field aligns with international trade rules and is crucial for the sustainability of the local canned fish industry, which has contributed significantly to import substitution and saved foreign currency for the government.
