Packaging industry says taxation will have ripple effect and hit multiple sectors

In a media statement about the tax increase on packaging raw materials under the proposed budget, the Sri Lanka Laminated Flexible Packaging Manufacturers’ Association says that the tax increase will only have a negative impact on the public who are the end consumers of packaged product. 

They state that it will fall short of being a sustainable solution to reduce the usage of polythene. Under the proposed budget for 2018, an import tax of Rs.10 was levied for every Kilogram of plastic resin. 

“The budget is portrayed as an environment-friendly budget; with measures targeted in that direction. However, in reality, these measures only burden the public in the form of increased product prices. Sri Lanka still does not have a sustainable solution to recycle garbage. Although many are trying quick fixes to solve this problem, their efforts are proving to be futile. The country needs a far-sighted programme and not a short-term fix and the leadership responsible must be committed to such a program instead of a short term solution. Far-sighted programmes need time, planning and patience. Taxation under the ‘green economy’is only a bigger burden to the end consumers,” said the spokesperson of the Association. 

The Association says that this taxation will have a ripple effect and hit multiple industries that are depending on the services of the packaging industry and eventually the end consumer. According to the Packaging Manufacturers’ Association, the current tax increase comes into effect on top of many other challenges already faced by the industry. While the prices of raw materials have been continuously on the rise over the past, the depreciating value of the Sri Lankan rupee, high cost of electricity andhigh bank interestrateshave put the industry in a difficult situation.

“Waste management and recycling are the responsibilities of the government. Eluding these responsibilities and imposing taxes in the guise of eco-friendly solutions is not a viable proposition to the larger issue. Tax revenues collected in the past on packaging raw materials havenot been utilized to find a sustainable solution to the problem. We urge the government to analyze all different aspects of the problem and reconsider these proposed taxations as these do not provide a real solution,”the spokesperson further added.