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COL rising but no respite for the people
The prices of a number of essential items including vegetables are tipped to go up further with the Government's imposition of a five percent tax on land transportation of goods. This would of course result in adding more burdens on the average person who is already suffering from the soaring cost of living. It is an accepted fact that when vegetables and other goods are transported from far away places like Dambulla or Badulla to Colombo are taxed, it is the consumers who ultimately has to foot the bill.

Though the Government had announced a price reduction on essential items through its third budget, the possibility of the cost of living going up due to the increase in VAT being imposed on a number of items from next year is very real.

Many point out that with the introduction of the new VAT system a number of items which were previously charged at 10 percent would, with the increased rate, be charged at 15 percent thereby reflecting a considerable change on the pricing of goods. But it is the government's contention that price of some items is bound to come down when those VAT on items previously charged at 20 percent would be reduced to the new unified rate of 15 percent.

With the new VAT changes essential food items such as Sugar, lentils, onions, chillies, coconut oil and dried fish are to go up by a further five percent besides the proposed increase in the prices of LP gas, water and electricity.

Also the prices of potatoes, Maldive fish, tea, poultry feed and unprocessed meat will go up while services provided at hotels, the Foreign Employment Bureau of Sri Lanka and the land transportation of goods are too to be increased by 15 percent.

Current market retail price of a kilo of sugar remains at Rs. 32.00, lentils at Rs. 52.00, onions (Sinnan) at Rs. 28.00 and (Vedalan) Rs. 73.00 and big onions at Rs. 42.00, dried chillies at Rs. 165.00, potatoes at Rs. 60.00, a bottle of coconut oil at Rs. 35.00 and dried fish (sprats) at Rs. 157.00 and (Kattawa) at Rs. 300.00.

Prices of LP gas, which is today a basic necessity in most households would in all probability going up yet again. A spokesman for Lanka Shell Gas Company told The Sunday Times that they have not yet been informed of a tax increase on gas but would be compelled to raise the price should the new tax system be imposed.

pposition Leader Mahinda Rajapakse speaking during the budget debate said that the price of a gas cylinder would go up by about Rs. 30.00 in case the new VAT system was implemented. He also said the price of a kilo of sugar would go up by Rs. 1.25 a kilo of lentil by Rs. 2.00 and the price of litre of diesel by Rs. 1.25.

However Finance Minister K.N. Choksy making his contribution to the budget debate told parliament that contrary to what the opposition is saying the people would be relieved to a large extent by the new budget because the prices of essential commodities have been brought down.

He also told parliament that according to the revised VAT rates there could be an increase of about Rs. 30 in a person's monthly expenditure. Mr. Choksy said that the Government would reconsider the VAT charges on LP gas, water and electricity bills.
Currently there is also a seasonal increase in the prices of goods mainly due to the Ramazan festival and the forthcoming Christmas season that is round the corner.

According to the weekly food commodity price bulletin issued by the Hector Kobbekaduwa Agrarian Research and Training Institute the prices of rice, red onions, potatoes, vegetables, coconuts, fruits, eggs and meat have been increased.

Prices of all the local varieties of rice have been increased by around Rs. 1.00 per kg. Samba No. 1 has gone upto Rs. 33.00 this week from Rs.32.00 last week and the prices of nadu and raw varieties have increased from Rs. 26.00 last year to Rs. 31.00 this year and this constitutes an increase of 19 percent. Red Onions (Vedalan) has gone up from Rs. 66.00 last week to Rs. 70.00 this week and last year during this period the price had been about Rs. 66.00. Retail prices of most varieties of vegetables except for cucumber, leeks and cabbage have increased.

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