Planters ask for tax relief to meet increased wage cost

By Nizla Naizer and
Uditha Jayasinghe

The estate workers strike over salaries continues to simmer with dissenting unions charging the salary agreement to be signed tomorrow as “traitorous” and workers continuing to protest the move.

Dissenting unions vow to continue protests ahead of agreement signing today Protestors in Bagawanthalawa had to be dispersed with tear gas by police when they threatened to attack the Ceylon Workers Congress (CWC) office in town. The unruly crowd gathered as CWC Leader A. Thondaman commenced a tour around up-country plantations to create awareness of the wage hike that had been increased from Rs.290 to Rs.405 following two weeks of trade union agitation. However this move received mixed results with the plantation workers disgruntled over the unions’ failure to keep the strike going until the Rs.500 demand was met.
The CWC leader is to tour the plantations of the Nuwara Eliya District today, but it was unclear whether he would proceed with the itinery given the reception he received in Bagawanthalawa. CWC members have charged the dissenting unions of trying to achieve political ends by prolonging the strike and have insisted that it was purely a trade union issue and should not encapsulate politics. Up Country People’s Front Leader P. Chandrasekeran termed the unions who agreed with the Planters Association of Ceylon as “traitors” and maintained that Rs.500 daily wage could have been won if the other unions had continued to strike. Following discussions with dissenting unions yesterday afternoon he vowed to continue the fight and mentioned that a fresh round of talks would be convened before the end of the week. Meanwhile, Planters Association President Dhamitha Perera told The Bottom Line that plantation companies are now focusing on the future and ways to recoup the 40% increase in wages. “This increase is going to cost us over Rs. 6 billion a year,” he informed, “And it is a cost that we cannot afford to bear.”
He said that the Collective Agreement which generally lasts two years must remain unchanged if the plantation companies were to survive. “If the workers agitate for more before this period is out, we may not be able to function.”
He appealed to the Government to consider classifying plantation companies as Zero Rated companies when charging VAT as they are currently in the Exempt category and cannot claim Input Tax paid. “Till three years ago, we were classified under the Zero Rated status where we were considered as indirect exporters and we could claim input taxes. This gives a relief of close to Rs. 30 million per Plantation Company per annum.”
However, since the Treasury revised their status to the Exempt category the companies have been unable to claim Input VAT taxes which the garment manufacturers still enjoy. “Reinstating the plantation companies into the Zero status will give us immense relief at this moment.”
Speaking on the situation in the estates he said that after the agreement was reached between the Plantation Companies and the unions, the workers had been willing to resume their duties as normal. “Under the advice of the unions that represent them and also the managers of the estates they work in, the workers were glad to be back at work.
However, the damage by the go slow campaign is not over yet. Over 1.5 million kg of tea sold to buyers at the Colombo Auction were stuck in the estates last week as the workers obstructed transportation; a situation Perera assured was resolved. “From Saturday till yesterday, the tea has been transported from several estates to Colombo. We only hope that the damage done internationally is not irreversible.” The tea was delivered two weeks late to the local buyers who then had to ship it to their international clients.
He also explained that the go-slow resulted in a disruption of the plucking cycle which would require another 3-4 weeks to turn around. “The go slow cost the industry close to Rs. 1 billion for the first week, but the situation has improved dramatically now that they are back on their normal routines.”
The Collective Agreement will be signed tomorrow by the Head of the Plantation Services Group S.K.L. Obeysekere and Employers Federation of Ceylon Chairman Ravi Pieris or his deputy, in his absence with representatives from Ceylon Workers Congress and Joint Plantation Trade Union Centre.

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