Paddy purchase, rice production and sale to be exempt from Social Security Contribution Levy

The Cabinet of Ministers has given the nod to amend the Social Security Contribution Levy to exempt the purchasing of paddy, and the production and sale of rice from the tax.

The proposal was tabled by President Ranil Wickremesinghe, in his capacity as the Minister of Finance, Economic Stabilization and National Policy.

Rice manufacturers have complained that they have to incur additional costs for electricity, water and transportation during the production process in addition to the payment made to the farmers for paddy stocks purchased from them while Rs. 6 - Rs. 7 per 1 kilogram of rice is charged from them for the Social Security Contribution Levy.

If the production cost is moderated, the rice manufacturers say they will be able to purchase paddy from the farmers at higher prices.

Taking these matters into account, the Cabinet of Ministers gave the nod to the proposal to amend the Social Security Contribution Levy Act to exempt the paddy purchase and rice production and sale from the tax.
 
By freeing the paddy purchase, and the rice production and sale from the Social Security Contribution Levy, the government expects to enable the mill owners to purchase 1kg of Nadu for more than Rs. 100 from the farmers, while maintaining the maximum retail price of rice per kilogram at its current rates.

The Cabinet of Ministers has also given the approval to provide rice free of charge for low-income families.