Sri Lanka: Special goods tax on imported potatoes increased

The special goods tax on potato has been increased to Rs.40 from Rs.35 per kilogram.

The revised special goods tax on potato became effective from midnight on August 24.

The aim of the government is to fetch a better price for the local farmer as domestic harvest has started reaching the market. The decision was taken subsequent to the constant request by local potato farmers to provide them a better price.

The annual consumption of potatoes in Sri Lanka is about 180,000 metric tons, and 70% of the requirement is imported. The government is spending 4,800 million rupees annually to import the required potatoes.

The increase in tax on imported potatoes was introduced to save this huge sum of foreign exchange while encouraging the local farmers who provide the balance 30% produce to the market.

This will also be expected to fetch a higher price for local potatoes and increase the productivity in potato cultivation.

However, the increase in special goods tax on potato will not affect the consumer as a maximum price control is currently effective on potatoes.

Source: www.dailynews.lk/