Urgent Measures Needed to Avert Collapse of Sri Lankan Canned Fish and Fisheries Industries

January 16, Colombo (LNW): In a recent media address in Colombo, Sri Lanka Canned Fish Manufacturers Association (SLCFMA) President Shiran Fernando emphasized the necessity for immediate actions to prevent the imminent collapse of the local canned fish and fisheries industries. Despite the government’s commitment to banning canned fish imports to Sri Lanka, the influx of nearly 19 million imported cans between September and November poses a significant threat, with an additional 20-25 million cans expected in the coming months.

Fernando highlighted the uneven playing field created by granting licenses for canned fish imports at a Special Commodity Levy (SCL) tax of only Rs 57 per tin (Rs 200 per kilo), while local manufacturers are burdened with an 18% VAT per tin. This taxation discrepancy results in a staggering increase of over Rs 125 per local canned fish tin, eroding its competitiveness. While endorsing the ban on canned fish imports, Fernando urged the imposition of an 18% VAT on all imported cans currently in the country, proposing an immediate increase in the SCL from Rs 200 to Rs 500 per kilo.

In addition, Fernando called for a change in the tax calculation basis, advocating for charging based on net weight rather than drained weight. Currently, the taxation system unfairly allows tins, labels, and water to enter the country duty-free, disadvantaging local canned fish producers.

Furthermore, Fernando stressed the absence of directives from the Consumer Affairs Ministry, Finance Ministry, or Inland Revenue Department, allowing supermarkets to sell local canned fish above the Maximum Retail Price (MRP). This practice results in manufacturers absorbing the VAT cost element, contributing to financial strain.

Fernando urgently called for remedial measures to be implemented without delay to avert a total collapse of the fisheries industry. He warned that all factories under the association have ceased canned fish production, leading to a halt in purchasing from fishermen and causing chaos in the industry, thereby jeopardizing the livelihoods of over two million individuals in the fisheries sector.