Sri Lanka footwear industry threatened by illegal imports

The Sri Lankan footwear industry is facing severe challenges due to a surge in low-cost, illegally imported shoes that avoid taxes, according to industry sources.This influx threatens local manufacturers, despite their capability to meet the entire domestic demand.

Investigations reveal a widespread racket involving the import of foreign-manufactured shoes through illegal channels, facilitated by certain corrupt customs officials. These shoes are released into the market at prices significantly lower than locally-produced footwear, causing a substantial drop in market competitiveness for local brands.

Each imported pair is typically subject to a Rs.2,000 tax, yet these illegal imports avoid such charges, leading to an annual tax revenue loss of approximately Rs.35 billion. Approximately 85 per cent of this market meets local needs, with the rest allocated for export

Neville Perera, Chairman of the Sri Lanka Footwear and Leather Products Manufacturers Association said due to these concerns, the local industry is under threat, putting 300,000 jobs at risk and destabilising a market valued at around Rs.150 million annually.

 

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