Sri Lanka Reduces Domestic Tax on Pakistani Kinnows
In a positive development, the Government of Sri Lanka has reversed its decision to increase CESS (Domestic Tax) on imported Mandarins (Kinnows) from Pakistan.
Pakistan has been a leading and steady supplier of quality mandarins to the Sri Lankan market in recent years. Last month, Sri Lanka had imposed a sudden increase in CESS on imported Mandarins from 30 LKR [Sri Lankan Rupee] per kg to LKR 160 per kg, making Kinnows exports from Pakistan almost four times costlier in the Sri Lankan market than before.
Although the tax was imposed on all imported Kinnows/Mandarins, the move particularly affected Pakistan as Kinnow is a concessional item under the Pakistan-Sri Lanka Free Trade Agreement (PSFTA).
Moreover, the Citrus season in the country had just commenced, and this development had placed export orders in immediate jeopardy.
The Pakistan Fruits and Vegetables Association (PFVA), exporters, and Sri Lankan importers had also expressed their concerns in this regard and requested intervention with the Sri Lankan Government.
To expedite an amicable resolution of the matter, the Ministry of Commerce, through its Trade & Investment Attaché, Asma Kamal at Colombo, immediately took up the matter with the authorities concerned in Sri Lanka.
Recently, the matter of illegal registration of brand name “Kernal” was also resolved via the Ministry of Commerce’s Trade & Investment Officer in the respective country.
It is expected that this reversal would support Pakistani Kinnow exporters in the challenging circumstances in wake of the COVID-19 pandemic.