Jul 12, 2018

Hopes rise for averting Sri Lanka bitter tax on sweets Featured

Hopes are rising that a second planned sugar tax which is aimed at putting sweets out of reach of poorer consumers may not be implemented following a meeting of confectioners with President Maithripala Sirisena.

"The government had proposed to tax food items based on their sugar content, but the President met us on Tuesday and assured us the tax will not be introduced to confectionery goods," Past-chairman of the Sri Lanka Confectionery Manufacturers' Association Quintus Perera said.

Perera who is chairman at Uswatte Confectionery Works said the proposed tax would have been 'a killer'.

"A roll of peppermint sells at 10 rupees, and the sugar tax would have pushed-up the selling price to 18.50 rupees," he said.

Under the proposed tax, sugar content of over 1.5g per 10g product would be taxed at 8.50 rupees, Perera said.

"It was a real concern," Perera said.

He hopes that the tax would not come after the meeting with President Maithripala Sirisena.

Sri Lanka's new administration imposed a European-style interventionist urban elitist sugar tax on sweetened drinks, driving consumers into artificial sweeteners and alternatives to natural sugar.

A sugar tax, like food import duties are regressive and has the biggest impact on the least affluent consumers, who may have no problem with obesity, no problem with over-consumption (since they are poor in the first place) and may in fact suffer from malnutrition.

Sugar taxes are part of a repertoire of coercive tools used for social engineering.

The current administration started in 2015 with a raft of price controls and minimum wages, following in the footsteps of some European countries who them with disastrous consequences. The administration is now paying the price, in terms of undermined credibility of the administration's policy making,

The administration has also announced a blatantly unjust 'carbon tax' also a brainchild of European interventionists, that will hit pensioners and old car owners, who rarely use their vehicles except for some marketing and visits to the doctor, critics have said.

Anti-market and interventionism has also allowed President Maithripala Sirisena to intervene in economic policy, which has made it difficult to implement policies that bring long-term benefits to the poor and the general population.