President intervenes to remove exorbitant charges on gem and jewellery exports

By Nishel Fernando
President Maithripala Sirisena has intervened in removing the exorbitant service charges slapped by the National Gem and Jewellery Authority (NGJA) on gem and jewellery exports and asked the NGJA Chairman and Director General (DG) to tender their resignations following a meeting the President had with the members of the Sri Lanka Gem and Jewellery Association (SLGJA) and other industry stakeholders last week, a SLGJA member told Mirror Business.

The SLGJA officials and gem exporters praised the timely intervention by the President in the matter which otherwise would have halved the total gem and jewellery exports in 2018.

“The exports were halted due to these charges from the latter part of last month. We are back to status quo as it was now,” a gem exporter said.

According to the SLGJA members, the President reprimanded the NGJA officials for not informing the Mahaweli Development and Environment Ministry about the Rs.25,000 service charge imposed on all varieties of sapphires, alexandrite stones, rare gem stones and other precious stones and similar charges imposed on Grade II stones and jewellery exports.

Hence, the President asked the NGJA Chairman and DG to tender their resignations.

The Human Resource and Administration Division of the NGJA confirmed that its Chairman Dr. D.M.D.O.K. Dissanayake and DG M.L. Gammampila have resigned from the NGJA with immediate effect.

Dr. Dissanayake has returned to his academic career while Gammampila was transferred back to the Mahaweli Development and Environment Ministry.

Mirror Business on April 19 reported that Sri Lanka’s gem exports were on a declining trend over the last couple of years mainly due to the export tightening measures taken by the NGJA while the gem and jewellery exports were at standstill this year due to the exorbitant service charges imposed by the NGJA from mid-April.

The gem exporters also charged that the top officials of the NGJA were not catering to industry needs while exhausting the exporters’ funds on various foreign tours instead of export promotion activities.
The SLGJA officials said that they would discuss the export tightening measures with the new NGJA chairman, who is yet to be appointed.

In addition, the SLGJA has also explained to the President about the negative implication of the recent 15 percent import duty imposed on gold imports, particularly its adverse impact on foreign exchange earnings from gold jewellery exports and jewellery sales to tourists.

The SLGJA officials point out that the removal of the income tax exemption through the new Inland Revenue Act (IRA) has also made Sri Lankan gem and jewellery exports less competitive in the international markets where the competition is extremely high with leading market players such as Hong Kong and Thailand, which have very liberalised policies encouraging exports of value-added gems and jewellery.

The SLGJA said such industry issues would be discussed with the relevant authorities in the upcoming weeks.

According to the SLGJA, the exports of gem and jewellery from Hong Kong have reached US$27 billion per annum and Thailand’s gem and jewellery exports amounts to US$13 billion per annum while the Sri Lankan export earnings lag well below US$300 million due to various policy issues.