Asia/Pacific News
Proposed Sri Lankan Bunker Tax "Unlikely"
A proposed 5 percent tax on bunker sales in Sri Lanka is unlikely to be brought into effect, local players familiar with the matter have told Ship & Bunker.
The country's government said recently it would apply the Ports and Airports Development Levy (PAL) to a fuel oil cargo that had already been delivered into the country and partly sold on, but following concerns raised by the local industry the tax was not actually applied.
A source told Ship & Bunker that following discussions with Customs officials, the Bunker Association of Sri Lanka has written to the government to express their concerns, which are now under review.
"I don't think they will bring in the tax, because if they did it would make bunkering here [in Sri Lanka] uncompetitive," the source said.
Some industry players have suggested that as the government already collects revenue from bunkering, the tax would be counter productive in terms of net revenue generation because bunker sales volumes would fall.
Lanka Business Online reported that Ralph Anandappa, chairman of the Ceylon Association of Ships’ Agents, as saying: "Bunkering brings about 800 million rupees a year to the country of which 750 million rupees goes to the government and the rest to other stakeholders."
The country has also spent some $1.5 billion developing the port of Hambantota, seen as a future bunkering hub for the country.
Ship & Bunker reported last year that the bunkering operation at Hambantota was the only part of the port not open to external investment.
