Imposing tax on coconut oil another episode of ‘sugar tax fraud’?

Finance State Minister Ranjith Siyambalapitiya’s statement that a tax of Rs.25 will be imposed on a litre of imported coconut oil in order to protect local coconut oil producers has created a stir.

A Special Customs Levy of Rs.15/- is already being charged for a litre of imported coconut oil.

However, State Minister Siyambalapitiya has made the new statement when stocks of nearly 10,000 tons of coconut oil imported are stored in bonded warehouses.

According to the economic experts, the coconut oil to be released to the local market in bonded warehouses will be exempted from the new tax and the importers will only have to pay the old tax of Rs.15/=.

Meanwhile, the price of a litre of coconut oil had decreased by Rs.40 in the last few weeks to Rs.535 due to the depreciation of the US Dollar.

However, the price of coconut oil has increased to about Rs.565 rupees per litre, with the US Dollar appreciating again from 302 to 333 rupees.

At present, no tax is paid at the port on imported coconut oil and palm oil to Sri Lanka, and a tax is paid when they are being released from bonded warehouses.

Therefore, the government has to collect taxes from imported coconut oil intermittently.

When ‘Sri Lanka Mirror’ inquired about the companies that operate bonded warehouses of imported coconut oil, it was reported that Asian Company, Narada Agro and Pyramid Wilmar operate bonded coconut oil warehouses.

Meanwhile, National Movement for Consumer Rights Protection President Ranjith Vithanage said that increasing the tax on imported coconut oil will not bring any relief to the consumers.

He expressed these views at a news briefing held yesterday (25).