Plantations in Kerala may 'bleed and sink' after hike in taxes

KOCHI: The Kerala government's decision to double plantation tax and increase land tax by 150 per cent when prices of rubber and tea have fallen will cause the industry to “bleed and sink,“ according to the Association of Planters of Kerala (APK). The tax increases were proposed on Wednesday in a bid to recoup revenue losses resulting from the decision to close liquor bars in the state.
Kerala is home to large tracts of rubber, tea, cardamom, pepper and coffee estates and contributes 46 per cent of the country's plantation produce.

APK chairman Gilbert D'Souza said the plantation tax has been doubled from Rs 350 per hectare when all other states have abolished it. The big plantations provide accommodation to the staff as a statutory obligation and now have to pay a higher building tax for facilities provided free of cost, he added. Already , the plantation industry pays a host of state and central government taxes. Agricultural income tax in Kerala, at 50 per cent, is the highest in the country . The new measures have come on top of these, he said.

With a 30 per cent fall in the price of tea, 40 per cent in rubber and 50 per cent in cardamom, production costs have exceeded realisations, leading to a serious cash flow position for plantations. Prices of tea and rubber have been dropping continuously , threatening to push the sectors back to the 1999-2006 crisis situation, D'Souza told media persons.

The additional taxes have been levied when the industry had expected some relief. The plantation study committee constituted in 2010 by the state government had recommended the abolition of plantation tax and agricultural income tax.