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Importers who made billions in profit reluctant to provide sugar at lower prices for three months
View(s):Sugar importers who made massive profits due to a tax concession given by the Government have expressed reservations to a Trade Ministry request to provide sugar to the state-owned Lak Sathosa franchise at lower prices for the next three months.
Sugar importers expressed their reservations during a meeting attended by Trade Minister Bandula Gunawardena. At the meeting, a request was made to make available sugar to be sold at Rs 98 through the Lak Sathosa franchise for the next three months.
Accordingly, the Ministry asked the local importers to ensure 4,000 metric tonnes of white sugar stocks be distributed via the Lak Sathosa franchise due to increasing demand in the local market. At present, white sugar is sold at Rs 116 a kilo.
The importers expressed reservations on the urgent request by the ministry, citing difficulties in financing, while pointing to the depreciating rupee value and the condition of settling the payment within seven days.
Most importers were beneficiaries when sugar taxes were cut to 25 cents from 50 rupees a kilo, thereby depriving the government a revenue of Rs 15 billion.
A Sugar Importers Association official said local sugar importers had been curtailed from importing sugar from May 25, following a directive issued by President Gotabaya Rajapaksa.
The Sunday Times learns that the Association had circulated a letter among importers that they were expected to adhere to the requirement of the Trade Ministry as they were beneficiaries of the reduction of the tax. The letter said they would be reported to the President if they failed to adhere to the request.
Trade Ministry Secretary Bhadranie Jayawardhana told the Sunday Times that a final decision in this regard was yet to be taken by the General Treasury though the Trade Ministry facilitated the discussions.
Meanwhile, three gazette notifications were issued on Friday instructing individuals who stock corn, sugar, powdered milk, paddy and rice to register themselves with the Consumer Affairs Authority (CAA) with the stock details within seven days.
In March, a Parliamentary Oversight Committee declared that Sri Lanka incurred a massive loss of Rs. 15.9 billion in taxes as a result of tax reduction to 25 cents from Rs. 50 per kg.
The parliamentary Committee on Public Accounts (COPA) noted that a handful of companies benefited by making a profit of Rs. 15.9 billion or a portion of it, indicating they had imported a large quantity of sugar ahead of tax reductions.
The Trade Ministry is also in finalising the bidding process through the state-owned State Trading Corporation (STC) for the import of 6000 metric tonnes of Basmati rice from Pakistan under Pakistan- Sri Lanka Free Trade Agreement.
Earlier, the Ministry decided to revoke licences issued to local importers to import Basmati rice citing irregularities. Later, the Ministry secured Cabinet approval to import through the state entity — the STC.
“Nearly 60 percent of the procurement process has been completed so far and we are looking forward to finalising it in the coming weeks,” the ministry secretary said.