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Removal of VAT exemptions, doesn’t affect UBER & PickME fares – CoPF

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The Committee on Public Finance (CoPF) has taken into consideration the Value Added Tax (Amendment) Bill which aims to remove VAT exemptions on certain items and includes provisions to discontinue the Simplified VAT (SVAT) system.

An official representing the Ministry of Finance stated that agricultural machinery and other equipment including chemical fertilizer which was listed as exempted previously will be VAT liable under the said Bill.  Adding to the said, officials stated that agricultural seeds, agricultural plants, shrimp feed inclusive of prawn feed and animal feed excluding poultry feed will however be exempted from VAT.

Thus, the Committee questioned the rationale behind including VAT for agricultural items which will impact the domestic agricultural and food industry. The aforesaid was taken up for discussion at the Committee on Public Finance held recently (28) in Parliament, Chaired by Dr. Harsha de Silva when the Committee met to consider the Value Added Tax (Amendment) Bill, The Finance Bill to amend the Finance Act, No. 35 of 2018 and the Finance Act, No. 12 of 2012 and the Imports and Exports Control Act pertaining to the Gazette No. 2353/16.

Re-evaluate
Furthermore, dairy products such as liquid milk and eggs will also be liable for the VAT. However, the Ministry of Finance stated that wheat, wheat flour or powdered milk, pharmaceutical products, drugs will be exempted. The Committee questioning the officials inquired why food products made out of grains cultivated in Sri Lanka, identified as high protein and high energy agro foods falling in the category of “Posha” is subjected to VAT in a context where Child malnourishment is considered to be on the rise.

The Committee questioned the officials as to why ambulances and medical equipment are being subjected to VAT. After thoroughly examining the Value Added Tax (Amendment) Bill, the Committee has granted approval, contingent upon the Ministry of Finance incorporating the amendments proposed by the Committee on Public Finance, provided they are in accord. Nevertheless, the Committee has urged the officials present to reevaluate VAT exemptions for medical equipment, ambulances, fertilizer, and food products derived from grains classified as high-protein agro foods and agricultural items.

No impact for UBER and PickME
The Committee of Public Finance further revealed that the elimination of VAT exemptions will not impact the fares of UBER and PickME. Dr. Harsha de Silva, the Committee Chair, emphasized that as UBER and PickME have included VAT since their inception, contrary to other beliefs, thus the proposed VAT changes will only result in a 3% rise without significantly affecting the ultimate fare that customers are required to pay.

The Committee on Public Finance also took into consideration the Finance Bill to amend the Finance Act, No. 35 of 2018 and the Finance Act, No. 12 of 2012 which propose provisions to release motor vehicles imported into Sri Lanka which were not cleared from customs due to import restrictions or non-payment of taxes. However, given the matters arising from importing and opening LCs post the suspension of motor vehicle imports by Gazette Extraordinary No. 2176/19 dated May 22, 2020, under the Import and Export Control Act, the Committee Chair instructed the Ministry of Finance to submit a report on the provisions to release 119 imported vehicles yet to be cleared from customs. The Committee thus decided to reconsider the said from thereon.

Moreover, following the consideration of the Imports and Exports Control Act pertaining to the Gazette No. 2353/16, the Committee approved the said.

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BoC employees to strike over unpaid incentives

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Employees of all Bank of Ceylon (BoC) branches have decided to walk out of service at 12.30 pm today (May 29).

The decision has been taken over the current management not taking the initiative to provide them with the 06-month incentive package approved by the Board of Directors, according to the Bank Employees’ Union.

Central Committee member of the Bank Employees’ Union – Najith Wijeratne, stated that they will initiate a token strike if this issue is not resolved by June 06.

BoC employees have also held lunchtime protests yesterday (May 28) in front of 22 branches in major cities islandwide.

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Imported salt released to market

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The National Salt Ltd. says that 2,800 MT of salt imported from India have been released to the market.

It says the food-grade salt stock, which arrived on May 23, is being distributed to the market through local salt sales agents for consumer sale.

The Ministry of Industry and Entrepreneurship Development states that Lanka Salt Ltd. is importing 10,000 MT of salt, while over 100 importers, including those from Pettah, are bringing in an additional 100,000 MT.

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Employees concerned as CEAT takes over Michelin Lanka

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Employees of Michelin Lanka Pvt Ltd, located in the Midigama area of Matara, allege that there are plans to sell the company.

This has raised concerns among employees about job losses, leading to protests. 

Workers allege that the company is planning to dismiss them with a minimal severance payment, which they believe is insufficient.

An employee has revealed to the media that after workers were informed about this decision, a newly formed employees’ union has set several demands to the company authorities.

Workers have demanded a fair severance package, but authorities have offered Rs.200,000, (a sum employees consider inadequate) reportedly asking them to provide resignation letters in return.

An employer also states that before the current government took office, Minister Wasantha Samarasinghe had proposed that forming a trade union could help secure workers’ rights.  However, the president and secretary of that union are now reportedly in hiding, he employer adds.

Meanwhile, holding a press conference recently, the Inter Company Employees’ Union had revealed that Michelin Lanka Pvt Ltd is in the process of selling the company to the Indian company – CEAT.

According to the union, CEAT has purchased a majority stake in the company.

As part of the deal, it is reported that the Midigama factory of Michelin Lanka Pvt Ltd  and part of its operations in Ja-Ela have been transferred to Indian CEAT company.

The Inter Company Employees’ Union had stated there was no issue as a MoU was signed between the two companies to secure workers’ rights. According to the agreement, Michelin Lanka Pvt Ltd had pledged to honor the full service period of affected workers, while CEAT agreed to provide appropriate compensation based on their years of service, the union adds.

Michelin Lanka was previously a part of Camso Loadstar (Private) Ltd, one of the largest suppliers of industrial tyres in the global market.

The situation at Michelin Lanka follows the sudden closure of the NEXT garment factory in the Katunayake Free Trade Zone a few weeks ago, leaving over 1,400 workers jobless.

In a statement, the company cited high production costs as the reason for shutting down operations in Sri Lanka.

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Posted by ITNnews on Monday, May 26, 2025

(Video credits : FB page of ITN)

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