SVAT a bone of contention for tea industry
The imposition of the SVAT scheme is likely to affect tea estate owners as exporters and factory owners want it to be deducted from growers as well.
Talks between the Tea Smallholders Association, the Tea Exporters Association and the Treasury on June 30 have reached a stalemate with the only affirmation that there will not be any reversal of the SVAT scheme.
According to Treasury officials the 18 per cent VAT is believed to be gradually reduced in time to come.
However, exporters have said at the meeting that there is a backlog of payments that the government needs to give back to the exporters and that these were not returned on time in the past as well.
But the more pertinent question now is whether this will impact the tea growers and in particular the small and medium scale estate owners who produce the largest export quantities but faces the most challenges due to their scale of operations and costs.
Smallholder opine some of the medium scale growers say they don’t have a large amount of money so they will move out of this in time to come.
The Treasury has stated that they will have another round of discussions with the relevant stakeholders in the tea industry to ascertain how this tax will be deducted from tea exports.
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