[caption id="attachment_6014" align="alignright" width="300"] "The Government has allowed Wilmar to import 7,000 MT of coconut oil and earn an additional profit of Rs. 175 million through the gazette game"  JVP Leader Anura Kumara Dissanayake[/caption] Concerns have been raised over the confusion created by the Ministry of Finance while amending the Special Commodity Levy imposed on imported coconut oil. It is alleged that the Government had created the confusion in order to give benefits to a private company importing coconut oil into the country, while causing a huge loss to the Government. Earlier, allegations had also been levelled against the Government for letting a private company, which was importing sugar to the country, obtain undue concessions, as the Government was not monitoring whether the public benefitted from the tax reduction. Although Trade Minister Bandula Gunawardana has passed the responsibility of monitoring the prices gazetted by the Government in the local markets, to the Consumer Affairs Authority (CAA), the CAA openly told The Sunday Morning that they are not monitoring or controlling the sugar prices. Nevertheless, consumer rights’ activists raised questions as to why the Government issued a gazette fixing a maximum retail price on sugar if the goods were not available at that price in the market.    Likewise, the importing of coconut oil has also created tax turmoil, as allegations have been made by Opposition political parties that the Government has let private companies obtain undue advantages while causing billions in losses to the State.    [caption id="attachment_110791" align="alignright" width="280"] "The tax on coconut oil is Rs. 125, and Sri Lanka Customs is applying the Rs. 125 tax on each kilogramme of coconut oil imported to the country"  Customs Media Spokesman and Director Sunil Jayaratne[/caption] According to the Extraordinary Gazette Notification 2181/23 signed by the Minister of Finance on 26 June, the amount of tax on purified coconut oil was stated as Rs. 150 per kg. The company, which also supplies cooking oil to the market, has been given the benefit of the import tax via the Special Gazette Notification No. 2206/3 issued by the Minister of Finance under the Special Excise Act for a period of six months from 15 December. Subsequently, in another Special Gazette Notification issued on 10 July, the Minister of Finance stated that the Special Commodity Levy on coconut oil will be reduced by Rs. 25 per kg. It is stated that it should be valid for a period of six months from 11 July. Despite this, issuing another Extraordinary Gazette, Prime Minister and Minister of Finance Mahinda Rajapaksa, on 14 December, stated that the Special Commodity Levy on imported coconut oil will be Rs. 125 per kg of coconut oil. According to the Gazette issued on 10 July, the reduction of Rs. 25 per kg and the imposition of the new levy of Rs. 125 via the notice issued on 14 December means that a tax of Rs. 100 per kg of coconut oil is currently in effect. The applicable levies have been reduced as follows – on the imports of coconut oil, from Rs. 150 per kg to Rs. 125 per kg; on other coconut oil, from Rs. 175 per kg to Rs. 150 per kg. The amended rates are applicable from 11 July 2020 for a period of six months. The levy on coconut oil was earlier increased on 26 June 2020.    However, while large-scale import companies enjoy this benefit, consumers do not benefit from lower coconut oil prices. In the notice issued by the Finance Minister, it is also stated that the previous Gazettes issued under 2183/44 and 2181/23 will be abolished and the new tax on coconut oil would be Rs. 125.  

The gazette game

  Meanwhile, the Janatha Vimukthi Peramuna (JVP) has accused Sri Lanka Customs of levying a low tax on a 7,000 MT oil consignment imported by a company named Wilmar last month. JVP Leader Anura Kumara Dissanayake pointed out that the stocks had reached the country on 14 December when the Government had issued a gazette fixing the Special Commodity Levy on the product at Rs. 125. “On 14 December, Wilmar imported 7,000 MT of coconut oil to the Port of Colombo. Taxes were paid at Rs. 100 per kg. This institution earns Rs. 175 million as a result of the tax reduction. Again, on 15 December, the tax was increased by Rs. 25. On 14 December, three persons imported coconut oil. Two are small-scale ones. The Government has allowed Wilmar to import 7,000 MT of coconut oil and earn an additional profit of Rs. 175 million through the gazette game,” he alleged.       Dissanayake also alleged that Government revenue is being lost due to the actions of the present Government. According to the statistics given by Dissanayake, total government revenue estimated for 2020 is Rs. 1,555 billion. But the loan and interest instalments alone cost Rs. 1,854 billion. The year 2021 is even worse, he said, as estimated total revenue was Rs. 1,919 billion, and Rs. 2,117 billion will be spent to pay the loan instalments and interest. This shows that the total revenue of the Government is not enough to pay the loans and interest instalments. The Treasury account already has a bank overdraft of Rs. 541 billion, he said. Commenting on the sugar tax, the JVP Leader stressed that on 13 October, tax on sugar was reduced to 25 cents and the Chairman of the CAA had increased the maximum retail price of white sugar to Rs. 85. But what happens now is that the Government has no taxes and the people have no cheap sugar. By the end of this year, approximately 100,000 MT of sugar will be imported. Roughly Rs. 10 billion in tax revenue will be lost, he added. When contacted by The Sunday Morning, Customs Media Spokesman and Director Sunil Jayaratne said: “The tax on coconut oil is Rs. 125, and Sri Lanka Customs is applying the Rs. 125 tax on each kilogramme of coconut oil imported to the country.” The present market price on one litre of purified coconut oil (cooking coconut oil) is around Rs. 600.