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Treasury check on tsunami imports
By Tyron Devotta
The Treasury has banned ministries, provincial councils and state agencies entering into memoranda of understanding or agreements directly with foreign donor agencies for tsunami rehabilitation and reconstruction efforts without proper consultation with the Ministry of Finance. Treasury Secretary P.B. Jayasundara has said this is being done to ensure full compliance with revenue laws and for better coordination of relief-related work.

The Treasury directive issued this week comes together with the re-imposition of Customs duties on a number of items that were permitted to be imported duty free two days after the tsunami disaster hit Sri Lanka. In accordance with these guidelines, duty free importation will be allowed only for medical supplies, milk powder, infant milk and infant food, roofing material and pre-fabricated houses (other than building materials produced locally).

The Treasury set out the new guidelines after declaring that the relief phase of the tsunami disaster management has now been transformed into a rehabilitation and reconstruction phase. Hence, Dr. Jayasundara has declared it has become essential to regulate the importation of items in accordance with relevant provisions of tax laws and other regulatory statutes.

Separate guidelines, Dr. Jayasundara has said, are being formulated regarding the duty concessions that will be granted on items imported for rehabilitation and reconstruction work in the tsunami-affected areas. There, he has asked ministries and other agencies to refrain from recommending items for such concessions.

He has pointed out that since 2004/2005 Maha paddy crop will be harvested soon, the import of rice or acceptance of rice as donations from abroad will not be encouraged. The duty free clearance of rice will not be allowed. The World Food Programme (WFP) has also been requested to procure rice from local producers if the WFP wishes to continue food aid.

The import of biscuits, used clothes, drinking water and instant food is also to be discouraged since there are implications on local industries. In addition to the essential relief supplies, it has been reported that large quantities of items such as computers, communication equipment, vehicles and cameras -- not directly given as tsunami relief -- have been imported on the recommendations of various government agencies, Dr. Jayasundara has pointed out.

He has therefore asked them to refrain from recommending duty free clearance of any items to the Customs or to any other regulatory agency without obtaining prior clearance from the Treasury.

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