News
|
||||
Traders
say VAT reduction negated by fuel costs More than 14 days after the budget many consumers complain about the soaring prices while traders confirm they have been compelled to increase some prices and have not been able to reduce prices. Though the VAT has been reduced through the Budget from 15% to 5% on items such as sugar, dhal, potatoes, onions, dry fish, milk powder, vegetables and chillies there has been no reduction in prices, while in some instances prices have increased. Traders complain that the increased transport, fuel and overhead costs they have to bear has resulted in an increase in commodity prices. A Pettah market trader, Kanum Perera speaking about the VAT and prices said "business is not like what it used to be. Prices have increased though the VAT has been supposedly reduced and the present Government saying it will reduce the prices. As yet no prices have been reduced. As a matter of fact the price of dhal increased today by three rupees." " Due to the constant fluctuation of prices, business has gone down. People who usually eat rice now eat bread," he said. Mr A. Arambamoorthy, owner of Amari Wills Lanka (Pvt) Ltd., who are importers and exporters of rice said after the budget the demand for foreign rice has increased because the locally produced rice prices have increased. " There is a greater demand for the imported red rice or nadu rice because a 50 kg. bag is Rs. 200-300 rupees cheaper than locally produced rice of the same quantity," he said. " 50 kg. of local nadu rice costs Rs. 1850 while the imported equivalent costs Rs. 1600. The main reason for the locally produced rice to be more expensive is because of the tax on the producer," he said. A retail shopkeeper, Anoma Wijeysekara in the Kollupitiya market said she has not bought red rice for the past three weeks because the price has gone up. Another trader said though the VAT has been reduced the price of some goods has increased. " Now chilli prices are less because the VAT has been reduced from 15% to 5%, but some commodities such as dhal and sugar are now being charged 5% when they were exempted from VAT earlier," he said. Consumer Protection Authority Director General Lal Abeygunaratne told The Sunday Times requests by gas companies Shell and Laufgs and milk powder companies to increase their prices had been rejected. "The question of refunds for goods still in warehouses will not arise as no VAT has yet been paid on them and there is no need to increase the prices of new imports for which VAT has been reduced", he said. Meanwhile, with the printing of money and increasing of public servants and pensioners salaries a rapid increase in inflation is expected. With the increase in inflation the cost of living is expected to go up. The Sunday Times learns an average family of four will have to bear an additional expenditure of Rs. 1500 per month on increased taxes alone. With inflationary effects taking place the rupee would devalue and the government will have to depend heavily on foreign reserves, foreign aid and loans. The government has not yet provided subsidies to Prima, the CTB, the Petroleum Corporation and for fertiliser. If they are not provided prices would increase resulting in a rise in the cost of living. |
||||
Copyright © 2001 Wijeya Newspapers
Ltd. All rights reserved. |
