Finance Ministry denies increase of special tax on nine food items

The Finance Ministry yesterday reiterated that a special commodity levy has been increased on potatoes and sugar only, dismissing speculation about hikes on seven other items.

Further clarifying the situation, the official said that this special commodity levy is imposed in lieu of the import taxes in order to maintain a stable price with the aim of protecting producers as well as consumers. The special commodity levy on several food items was imposed via a special gazette with the Finance Ministry having authority to further extend it if needed. Accordingly, this gazette notification, which imposed special commodity tax on several food items, was issued on the instructions of the Finance Minister Ravi Karunanayake on Tuesday.  Under this new gazette the special commodity levy on imported sugar has been increased by Rs. 12 per kilo and by Rs. 10 per kilo on potatoes. The special commodity levy on all other items including dhal, onion,  green peas,  chickpeas, cowpeas, kurakkan, margarine etc. remain unchanged, said the official. All food items not mentioned in that gazette would be subject to normal import duty and other taxes inclusive of VAT, PAL and NBT.

Revision in prices of imported potatoes expected only next month

• Traders continue to sell at old cheaper price yesterday despite Treasury move on Wednesday

By Waruni Paranagamage

The vendors at economic centres yesterday revealed that there was no increase in imported potato prices although the Government had revised the levy upwards by Rs. 10 per kilogramme with immediate effect. 

They said that even though the Government increased the price of imported potatoes up to about Rs. 80 per kilogramme it would only be reflected in the retail pricing from next month onwards as the supplies are from older stock. The levy was increased by 33% from Rs. 30 to Rs. 40 per kilogramme.

Dambulla Economic Centre Potato vendor M.I.M Miyas told the Daily FT that the price would not change before the Yala season stocks enter the market as the Government anticipated.

“Today, one kilogramme of local potatoes from Nuwara Eliya and Welimada were sold at Rs. 95 and Rs. 85 respectively while the imported potatoes were sold at Rs. 75 per a kilogramme. The importers are still releasing the potatoes from their previous stocks at the price before the revision,” Miyas added. 

Describing the quality and the demand for imported and local potatoes, Miyas further said that the local potatoes had much better quality compared to imported potatoes.  “The imported potatoes are almost in an ‘inconsumable’ condition when they enter to the market. But the local potatoes are fresh and there is a higher demand for potatoes that are harvested from Nuwara Eliya,” Miyas added. Meanwhile, Department of Agriculture (DoA) officials revealed that it had around 10,000 MT of imported potatoes in stocks islandwide whereas the local monthly demand was around 15,000 MT. However, it is expected to produce 40,000MT of potatoes during the ongoing Yala season. DoA data reveals that Sri Lanka imports 120,000 MT of potatoes annually from India, Pakistan and China to meet local demand. 

The Finance Ministry’s decision on Wednesday was to ensure a better and more reasonable price for local farmers who were engaged in potato cultivation.