Footwear sector prepares a strategic plan on Treasury directive
Sri Lanka’s footwear and leather products industry has prepared a strategic plan to achieve the US$1 billion revenue target by 2020 based on a directive by the Treasury Secretary Dr. P.B. Jayasundera.
At a recent meeting attended by representatives of the Sri Lanka Footwear & Leather Products Manufacturers Association and senior officials of the Finance Ministry, Dr. Jayasundera had asked the association to prepare the plan, official sources said.
It was directed to devise this plan in collaboration with the Export Development Board, Industrial Development Board, Ministry of Industries and Ministry of Finance.
The Treasury Secretary had given an assurance at the meeting to provide necessary assistance and create infrastructure conducive for footwear and leather product manufacturers to promote the industry, official sources revealed.
The assurance was in response to demands made by the association in a letter sent to the President last month.
According to official sources, Dr. Jayasundera had praised manufacturers for their commitment to protect the local industry without becoming importers.
The strategic plan has proposed to introduce fiscal measures to prevent the influx of imported shoes especially by illegal means affecting the sustainability and the growth of the industry and revive the previous duty structure of 30 per cent import duty on CIF Value or Rs. 100 per pair whichever is higher, while CESS is to remain at the current rate of Rs. 500.
Another proposal is to introduce a CESS of Rs. 250 on footwear uppers in addition to the prevailing import duty of 30 per cent and implement an export rebate scheme (3 per cent) to all manufacturers who achieve 5 per cent of incremental value of exports over the previous year.
As a medium and long term strategy, it has been proposed to introduce a subsidiary scheme to reimburse 25-50 per cent of the cost of imported hi tech machinery or financial assistance in the form of low interest loans.
“Footwear and several other leather goods are imported without paying legitimate duty and dumped into the market and selling less than Rs. 500 when the minimum duty is Rs. 500.
All the invoices are under invoiced and most goods imported are stock lots,” an association spokesman said.