Siyambalapitiya assures stable sugar imports amid tax hike

Wednesday, 8 November 2023 00:26 - - {{hitsCtrl.values.hits}}

State Minister of Finance

Ranjith Siyambalapitiya

IRD initiates scrutiny on profits of sugar-importing firms
Audit to ensure additional profits from sugar imports properly reported in their income tax calculations
Says supplementary tax will be levied on companies that have not included profits in their income tax calculations

State Minister of Finance Ranjith Siyambalapitiya assured that there will be no abrupt disruptions in the import of sugar despite the recent hike in the special commodity tax from 25 cents to Rs. 50 per kilo.

He announced that the Inland Revenue Department has launched an audit to investigate how importers have garnered substantial profits in light of this tax surge.

He made this statement in response to an inquiry posed by the Leader of the Opposition in Parliament under Standing Order 27 (2).

As of 2023, Sri Lanka has imported 546,488 tons of sugar. The State Minister cited customs reports, noting a decline in sugar imports in the latter part of the year compared to the initial five months.

Siyambalapitiya highlighted that around 35,000 tons of sugar were imported before the tax imposition, a quantity deemed sufficient to meet domestic demand.

He explained the Consumer Affairs Authority’s implementation of a Maximum Retail Price (MRP) to curb potential hikes in existing sugar stocks due to tax adjustments.

The State Minister also disclosed that the Inland Revenue Department (IRD) is actively scrutinising whether any company has accumulated additional profits from sugar imports.

“If such profits were not factored into income tax calculations, supplementary taxes will be levied. A comprehensive report on the findings will be presented to Parliament following the audit,” he said.

Separately, he said that five alcohol manufacturing companies owe the Government Rs. 2,715 million in back taxes, with an additional monthly penalty of 3% for late payment, totalling Rs. 6,721 million.

“Due to non-compliance with tax deadlines, four of the five companies have not had their licenses renewed. Only one company has initiated legal proceedings, prompting an extension of their license till 13 November, the next court date,” he added.

Highlighting the success of the Government’s introduction of advance personal income tax, the Siyambalapitiya said an income of Rs. 107.1 billion was collected in the first nine months of the year, surpassing the initial target of Rs. 100 billion.

He projected an income of Rs. 150 billion in the next three months, signifying a 150% growth over the estimated revenue.