Import restriction on 1000 items to be relaxed
In a latest move towards relaxation of import controls imposed in March 2020 to save dollars, the Finance Ministry is considering lifting of import restrictions on around less than 1000 items from 3000 items (HS codes), State Minister of finance Shehan Semasinghe confirmed.
The Business Times reliably learns that electronic items including computers, mobile phones, television sets, home appliances, stationery items, food items, clothing material and garments, leather products, cosmetics, medical equipment, spare parts, raw material required for industries, agriculture equipment, bathroom fittings and ceramic tiles are among the items on which import restrictions would be relaxed.
A considerable number of businesses are fighting for survival. Small business enterprises have already shut down, affecting direct and indirect employment of hundreds and thousands of people and their livelihoods.
The government has restricted imports of 3000 items (HS codes) ranging from motor vehicles and air conditioners, to beer, clothing items, cosmetics and even spices such as turmeric — an essential cooking ingredient for many local households.
But the controls failed to either stop imports, or maintain foreign reserves as money was printed. Now the country is running balance of payments surpluses despite the import controls being brought down, he disclosed to the Business Times.
Under this set up the Finance Ministry has devised a comprehensive plan with necessary guidelines to relax import restrictions in a manner that it would not be harmful to the government policy framework.
State Minister Semasinghe categorically stated that the government has not identified the relevant items which would be under relaxation of import control.
Hence a certain component of imports such as raw material would be used to re-export as finished products, the imports shouldn’t be restricted and if they are to develop the economy based on information technology, then all imports required to achieve the objective should be allowed, he added.
A report containing this comprehensive plan will be submitted to the International Monetary Fund in June regarding the relaxation of import restrictions that are currently in effect.
He added thereafter any changes can be discussed based on Sri Lanka’s financial progress. In a joint press release, the European Union (EU) has also urged Sri Lanka to lift the import restrictions, preventing many European products from entering its market.
Treasury officials said the Central Bank, the Industries Ministry and the Treasury senior officials are working out the quantity of items on which restrictions would be lifted.