No revenue loss from tax cuts on sugar - Finance Secretary
March 13, 2021 08:06 am
Secretary to the Ministry of Finance S.R. Attygalle has insisted that there is no such thing as revenue loss in a tax deduction scenario.
His remarks came during a media briefing convened earlier on Friday (March 12).
The import tax on sugar was reduced from Rs. 50 per kilogram to 25 cents last year and people are claiming there was a revenue loss to the tune of Rs. 15.9 billion, Mr. Attygalle added.
“Some revenue will be, in a way, reduced because of this action. But we are looking at the bigger picture. So, in a tax deduction scenario, I don’t think revenue loss could be talked about. But if you do a simple arithmetic, somebody can say there is a revenue loss. But we don’t interpret it as a revenue loss. Then we can’t do any reduction.”
Mr. Attygalle added that the retail price of sugar was Rs. 135 when the tax levied on sugar was reduced to 25 cents.
He went on to explain: “The tax-free or the CIF (Cost, Insurance, Freight) price was Rs.72 and including taxes it was Rs. 121. Starting from October to December, the CIF price of Rs. 72 increased to Rs. 85. However, the sugar prices fell from Rs. 135 to Rs. 114. It was possible due to the tax reduction. The CIF value which was at Rs.72 before, now stands at Rs. 90. Had there not been a reduction, the price of sugar would have increased to nearly Rs. 175. The price of sugar today is Rs. 115 and people have received the benefits.”
Mr. Attygalle added that the newly amended tax concessions with the aim of boosting certain industries will be gazetted next week.
