The Committee on Public Finance (COPF) has instructed the officials of the Ministry of Finance to declare the selling price of wheat flour per kilogram as Rs.198 in order to prevent two major companies from making excessive profits and to protect the consumers.
This was discussed when the committee met on August 15, chaired by Patali Champika Ranawaka, who was appointed as the pro tem chairperson in the absence of Dr. Harsha de Silva, the Parliamentary Communications Department said.
At the meeting, attention was drawn to the Regulations under the Imports and Exports (Control) Act, No. 1 of 1969 published in the Gazette Extraordinary No. 2336/45 dated June 14, 2023, which is to be approved by the Parliament.
The officials of the Finance Ministry have said the gazette published on the said date was issued with the aim of preventing the various companies importing wheat into Sri Lanka from making excessive profits by overstocking.
Therefore, instructions were given to provide accurate data on the existing stocks of wheat flour to confirm if the desired objectives of the gazette had been achieved. Thus, the pro tem COPF chair noted that this would give an opportunity to find out if any irregularities have occurred.
Attention was also drawn to the Order under the Export Development Act No. 40 of 1979 published in the Gazette Extraordinary No. 2336/71. The order to increase the cess levied on raw materials imported for cement production by Rs. 2.00 per kilogram was discussed there. The pro tem COPF chair pointed out that the construction sector can be greatly affected by increasing the cess levy on raw materials for cement manufacturing.
Furthermore, the committee pointed out that the selling price of cement after deducting all taxes is Rs. 700 higher than the price of cement unloaded at the port, the statement added.
The pro tem COPF chair ordered the officials of the Finance Ministry and the Urban Development & Housing Ministry to submit a report on the matter as it appears that there is a huge gap between the landed cost and the selling price of cement and iron after all related taxes are deducted.
Furthermore, it was revealed that the construction work of many houses, including low-income and middle-class houses, under the projects initiated by the Urban Development Authority, has stalled. The COPF thus called for a report on how the construction industry has been affected thus far.
The officials also pointed out that the construction of a house, which earlier cost approximately Rs. 1.2 million, now costs at least Rs. 2.4 million. The committee also discussed the lack of proper evaluation of the social impact of rates increased by the Finance Ministry in a bid to boost state revenue, which it said is a huge concern. Furthermore, the COPF pointed out that the relevant departments should intervene in the regulation of cement prices.
The Order under the Colombo Port City Economic Commission Act, No.11 of 2021 published in the Gazette Extraordinary No. 2343/60 and the Order under the Strategic Development Projects Act, No. 14 of 2008 published in the Gazette Extraordinary No. 2339/08 were also taken into consideration at the meeting. The officials of the Port City Economic Commission and the Board of Investments elaborated on the issues including the non-adherence of concessional measures to attract investments.
Thus, subject to the above-mentioned recommendations, these four gazettes were approved by the COPF.
Members of Parliament Mahindananda Aluthgamage, Dr. Nalaka Godahewa, Premnath C. Dolawatte and Madhura Withanage, also attended the meeting.
