Sri Lanka's Textile Manufacturers' Association (STMA) is urging the government to extend a value-added tax (VAT) exemption currently enjoyed by handloom textile producers to power loom manufacturers as well. The association argues, this move will ensure e survival of the local industry and the livelihoods of thousands of workers.

The crux of the issue lies in the uneven playing field created by the current VAT structure. Locally produced fabrics face a 15 per cent VAT, making them more expensive compared to imported textiles that are exempt from the tax. This price disparity discourages consumers from choosing domestic products, putting the local industry at a significant disadvantage.

EANS Perera, Chairman, STMA, emphasises, the decision to levy VAT only on local manufacturing textiles has jeopardized the livelihoods of around 50,000 people, especially those in the power loom sector. Currently, imported handloom and power loom textiles are VAT-exempt, while domestically produced power loom fabrics are not, he adds. .

He urged the government to extend the VAT exemption to power loom manufacturers. This will level the playing field and create a fairer market environment for the local industry, he adds.