Govt to recover loss of Rs. 16 Bn incurred from tax cut on imported sugar
November 9, 2022 06:07 pm
The revenue of Rs. 16 billion that the government lost after the special commodity levy imposed on sugar was slashed by the previous administration in 2020, Acting Finance Minister Ranjith Siyambalapitiya says.
He made this remark in parliament today (Nov. 09), presenting a document compiled by the Commissioner-General of the Inland Revenue Department (IRD) based on the report of the Auditor General.
Siyambalapitiya explained that, pursuant to the existing law, 24% of the aforementioned amount can be recovered from the relevant companies as income tax.
The previous government reduced the special commodity levy on imported sugar from Rs. 50 per kilogram to Rs. 0.25 per kilogram for a period of three months effective from October 14, 2020, with the aim of controlling the increasing prices in the market.
However, it is estimated that the government has lost an income to the tune of Rs. 17.76 billion as sugar importers profited from tax reduction without giving its benefits to the members of the public.
Ten such companies that made huge profits from the tax cut have been identified.
One of them has reportedly imported 45% of the total amount of sugar imported to the country. The Auditor General’s report further revealed that the amount of sugar imported by this company skyrocketed by 1,220% just within these three months, in comparison to the amount it imported during the same period last year.
Siyambalapitiya said the government intends to recover the loss from these companies, pursuant to the powers vested in the Commissioner-General of the IRD.
He also appealed to the Members of Parliament to extend their support to the government in this regard.
In the future, the Finance Ministry would not implement such tax cuts without consulting all relevant stakeholders, Siyambalapitiya assured.
