Sri Lanka, June 28 -- Tea industrialists in Sri Lanka are issuing a stark warning that the proposed abolition of the Simplified Value Added Tax (SVAT) could trigger an approximate 18% drop in tea prices at the Colombo Tea Auction.

They contend this significant reduction is due to buyers being required to pay an 18% VAT upfront, a burden currently alleviated by the SVAT scheme, which defers or suspends VAT payments for eligible exporters.

The warning comes from a joint statement issued by the Sri Lanka Tea Factory Owners' Association, the All Island Federation of Tea Smallholder Development Societies, and the Estate Owners Association of Sri Lanka.

They caution that if these tax amendments are implemented, small and medium-scale tea gro...