Business

16 fish canning factories see closures and layoffs thanks to tax policy ‘favourable’ for importers

Published

2 years ago

2024/03/4

Sri Lanka Canned Fish Manufacturers Association (CFMA) addresses the press in Colombo about the absence of a level playing field for local canneries. Pic by Nishan S. Priyantha

“We want a level playing field and not subsidies or protectionism’

by Sanath Nanayakkare

Importers of canned fish have completely crowded out local manufacturers because of a government tax policy skewed towards importers, says Sri Lanka Canned Fish Manufacturers Association (CFMA) President Shiran Fernando.

“It is pathetic that the authorities have not cared about it yet although we have officially informed them of the tax anomaly which has translated into an unfair ‘pricing advantage’ for canned fish importers and a curse for local manufacturers,” he says.

“The government charges less tax from canned fish importers allowing them to mark their prices down by about Rs. 125- 150 for a can of fish. And we, the local canned fish manufacturers who pay income tax, VAT, electricity bills, water bills, EPF/ETF etc., cannot compete with importers who pay only a border tax and get away with it. These canned fish importers need only a desk and chair and some money in the bank or a credit facility from foreign canned fish manufacturers. Their business is such a convenient one whereas ours is a constantly dedicated factory process. And the government’s tax policy complements the importers perfectly to bulldoze the local manufacturers of canned fish who have built this industry from zero. We can’t figure out why these highly qualified government authorities don’t get this basic and simple thing,” he says.

When asked to elaborate on their Association’s current concern, Fernando says,” Look, importers pay only Rs. 200 per kilo of fish they import as a special commodity levy – not for a can; for a kilo of fish. They don’t pay any VAT. We are told that when there is a border tax in the form of special commodity levy, VAT can’t be levied. We don’t know whether that is true or not. However, for us, there is income tax, VAT at the rate of 18%, workers’ wages, fuel costs, EPF/ETF etc. Altogether these push our production costs high. And when we finally send our products to the market, we find that the importers have conveniently converted their tax advantage into a strategic pricing point, and consumers who have been hard hit by the cost of living choose to buy the cheaper product. Importers get two good things at the same time; less tax and pricing advantage whereas we are caught in a double bind between higher production cost and less competitiveness in the market,” he says.

“It has been more than two months now since we pointed out this matter to the authorities in the responsible line ministries. If the government doesn’t want to address this issue objectively and quickly enough, the repercussions of permanent closure of our factories could be dire not only for the 16 manufacturers of our Association who have invested in this industry, but also for the 4,000 direct employees who have toiled for more than 10 years to develop the industry up to this level. This could be the end of a success story of import substitution,” he says.

“Mind you, there will be a lot of Linna fish coming to the market as the season is nearing. But the fisher folk will not see us coming to buy their catch because we can’t compete with imported products that enjoy a pricing advantage over us. This could cause an economic and a huge social issue”, Fernando warns.

When asked what they expect the authorities to do to resolve the issue, Kapila Balasuriya, Secretary CFMA says,” We are not asking for tax subsidies. We know that the government needs revenue and we are willing to pay it. But the government must act upon creating a level playing field for both local manufacturers and importers. That’s key. We must make it clear that we are not asking for protectionist measures.

But the tax anomaly has become a blessing for importers and a curse for local industry. This must be rectified. We have suggested the authorities to increase the Rs.200 per kilo SCL applicable to importers to Rs. 500. Then that will equalize our competiveness in the market and the consumers will be able to buy canned fish for freshness, quality and price instead of considering the price only. We appeal the authorities to create this level playing field for competitiveness. That’s not asking too much as local manufacturers because creating a level playing field for all players in the market is in line with international trade rules.”

CFMA represents all the registered canned fish manufacturers of the country numbering 16 leading companies in the industry. According to CFMA, their production had saved foreign currency worth of 79 million euros per year for the government by way of import substitution in given years.

All News Advertisement

Business

‘Sri Lanka’s forests are undervalued economic assets — and markets are paying the price’

Published

18 hours ago

2026/02/3

Sahan Weerasooriya

Professor Friedhelm Goeltenboth

Sri Lanka’s economic strategy continues to focus on exports, productivity and fiscal consolidation.

Yet one of the country’s most valuable assets — its forests and traditional forest-based farming systems — remains largely absent from economic planning. This is no longer an environmental oversight. It is a business risk.

At a recent Dilmah Genesis Thought Leadership Series lecture in Colombo, tropical ecology expert Professor Friedhelm Goeltenboth delivered a clear message: once forests are destroyed, the economic value they provide is lost permanently.

What replaces them — monoculture plantations — may appear efficient, but over time they generate declining yields, rising input costs and growing exposure to climate shocks.

From a financial perspective, this is asset depletion, not development.

Monoculture systems simplify production but externalise costs. Soil erosion, fertiliser dependency, water stress and biodiversity loss eventually hit farmers, banks, insurers and the state.

Sri Lanka is already seeing the consequences through falling productivity and rising agricultural vulnerability.

Forest-integrated farming offers a different model — one that treats land as a multi-income asset.

Spices such as cinnamon, pepper, cardamom and nutmeg can be grown under shade alongside fruit, timber and fibre crops, stabilising income while protecting soil and water. For lenders and insurers, diversified systems reduce risk. For exporters, they support traceability, sustainability certification and premium pricing.

The strongest business opportunity lies in carbon markets. Voluntary carbon markets allow companies to offset emissions by funding verified forest conservation and restoration.

Across Southeast Asia, communities now earn income simply by protecting forests that store carbon.

Sri Lanka has the scientific capacity to enter this space. Farmers can collect data; experts can certify it. What is missing is a coordinated national framework that allows communities and corporates to participate efficiently.

Carbon revenue will not replace agriculture, but it can stabilise it — providing income during crop maturation and creating a new form of export: environmental services.

Ignoring this opportunity carries downside risk.

Biodiversity loss, pollinator decline and climate volatility threaten long-term agricultural productivity. Forests are not sentimental assets; they are economic infrastructure.

Sri Lanka’s recovery cannot be built on short-term extraction. If the country wants resilient growth, it must start recognising the real value of what is still standing, he added.

By Ifham Nizam

Business

Pavan Rathnayake earns plaudits of batting coach

Published

18 hours ago

2026/02/3

Sahan Weerasooriya

Sri Lanka batting coach Vikram Rathour has hailed middle-order batter Pavan Rathnayake as one of the finest players of spin in the modern game, saying the youngster’s nimble footwork and velvet touch were a “breath of fresh air” for a side long troubled by the turning ball.

Drafted in for the second T20I after Sri Lanka’s familiar struggles against spin, Rathnayake looked anything but overawed by England’s seasoned tweakers, skipping down the track with sure feet and working the ball into gaps with soft hands.

“He is one of the better players when it comes to using the feet,” Rathour told reporters. “I haven’t seen too many in this generation do it as well as he does. That is really impressive and a good sign for Sri Lankan cricket.”

Sri Lanka went down in a last-over nail-biter but there were silver linings despite the hosts being a bowler short. Eshan Malinga was forced out after dislocating his left shoulder and has been ruled out for at least four weeks, a blow that ends his World Cup hopes. Dilshan Madushanka, Pramod Madushan and Nuwan Thushara have been placed on standby.

Power hitting remains Sri Lanka’s Achilles’ heel and Rathour, who carries an impressive CV from India’s T20 World Cup triumph two years ago, pointed to a few grey areas in the batting blueprint.

“There are two components to T20 batting,” he said. “One is power hitting, but the surfaces here, especially in Colombo, are not that conducive to clearing the ropes. The wickets are slow and the ball doesn’t come on to the bat. The other component, just as important, is range as a batting unit.”

Even when Sri Lanka lifted the T20 World Cup in 2014 they were not blessed with a dressing room full of big hitters, relying instead on sharp running, clever placement and a mastery of spin. Rathour preached a similar mantra.

“If you are not a team that hits a lot of sixes, you can still find plenty of fours by utilising the whole ground,” he said. “Most of them sweep well, reverse sweep and use their feet. That is encouraging. If you don’t have the brute power, you can make up for it by using angles and scoring square of the wicket.

“These wickets perhaps suit that style more. They are not the easiest surfaces to hit sixes, and I’m okay with that. If they can use their feet and the angles well, that is as good.”

Rex Clementine
at Pallekele

Business

Unlocking Sri Lanka’s dairy potential

Published

18 hours ago

2026/02/3

Sahan Weerasooriya

Sri Lanka’s dairy and livestock sector is central to food security, rural livelihoods, and national nutrition, yet continues to face challenges related to productivity, climate vulnerability, market access, and financing.

In this context, Connect to Care and DevPro have entered into a formal partnership through a Memorandum of Understanding (MoU) to support Sri Lanka’s journey towards dairy self-sufficiency.

A core objective of DevPro is to strengthen inclusive and resilient dairy value chains by empowering smallholder farmers through technical assistance, capacity building, climate-resilient practices, and market-oriented approaches, building on its extensive field presence across Sri Lanka.

A core objective of Connect to Care is to support the achievement of dairy self-sufficiency by 2033, as outlined in the national development manifesto, with an interim target of 75% self-sufficiency by 2029.

By strengthening local dairy production and value chains, this effort will also help reduce Sri Lanka’s dependence on imported dairy products, while improving farmer incomes and domestic supply resilience.

The partnership will focus on climate-smart dairy development, multi-stakeholder coordination, and exploring blended finance and PPP models—providing a structured platform for development partners and the private sector to engage in scalable action.