By: Staff Writer
August 02, Colombo (LNW): The Fisheries Ministry is contemplating a temporary halt on canned fish imports following complaints from local manufacturers who are struggling with a recent VAT increase from zero to eighteen percent. This tax hike, coupled with issues surrounding the quality of imported canned fish, has exacerbated challenges for the local industry.
Currently, 30 containers of substandard canned fish from China, deemed unsuitable for human consumption, are being held at the port. These imports are problematic as they consist of fish that have been stored in deep freeze for extended periods.
The local manufacturers have also highlighted that despite a ban on canned fish imports, a significant amount of such products have been entering the market, with some being sold at very low prices, leading to further market distortions and illegal activities.
The proposal to ban canned fish imports emerged after the Canned Fish Manufacturers Association met with Fisheries Minister Douglas Devananda. The meeting addressed the struggles faced by local manufacturers due to the tax increase, which has caused a significant price disparity between locally produced and imported canned fish.
With the VAT hike, the cost of locally manufactured canned fish is expected to rise by Rs 125, making it difficult for local producers to compete with cheaper imported options.Minister Devananda acknowledged the need to balance supporting local manufacturers with maintaining consumer affordability.
He has instructed senior officials to explore the possibility of implementing a new levy on recent imported fish stocks to address the price disparity and market challenges.
The Lanka Canned Fish Importers Association has also expressed its concerns about market difficulties. Imported canned fish currently faces a Special Commodity Levy (SCL) of Rs 200 per kilogram, with prices ranging from Rs 425 for Chinese brands to Rs 975 for Chilean brands.
Local canned fish prices start at Rs 690 and are expected to increase by Rs 100–125 due to the VAT adjustment. Local manufacturers also pay an SCL tax of Rs 6 per kilogram for imported raw fish.
The Canned Fish Manufacturers Association, represented by President Shiran Fernando, has warned that the local industry, which employs around 2,000 people, is facing critical challenges due to these unfair market conditions.
