• Transport cost hike a key factor in considerations 

The All Ceylon Bakery Owners’ Association (ACBOA) said that it was yet undecided on increasing prices of bakery products even though the cost of transportation has increased with the recent increase in the value-added tax (VAT).

Speaking to The Daily Morning yesterday (3), ACBOA President N.K. Jayawardena said that no decision had been taken to increase prices of bakery items as claimed by several parties. He also said that even though the recently implemented VAT increase did not apply to wheat and wheat flour, transportation cost has increased with the fuel price hike. Therefore, he said that a decision was yet to be made regarding the issue in the future.

Meanwhile, the National Consumer Front (NCF) urged the Government and the Consumer Affairs Authority to regulate market behaviour as soon as possible since mediators between manufacturers and consumers were earning profits illegally under the guise of the tax increase. 

Speaking to The Daily Morning yesterday, NCF Leader Asela Sampath said that vendors and shop owners exploit consumers by placing all their misbehaviour into the account of the Government’s recent decision to increase VAT. He also said that even though the VAT increase is not imposed on certain essential food items, the increase of fuel prices following the said increase would affect the increase of the prices of many essential goods. 

He further said that the Government must launch a programme to increase transparency in tax collection. “The Government increases taxes. We pay what they impose. But we don’t know whether the Treasury gets the revenue that they expect. Therefore, this process must be transparent. As consumers, we urge the Government to declare the details of the tax revenue that they get through increased taxes,” he said.

According to the Ministry of Finance, Economic Stabilisation, and National Policies, several essential food items like wheat, wheat flour, and infant milk powder will remain VAT-exempt. The Ministry recently clarified that the ports and airports development levy (PAL) currently imposed on fuel and gas was set to be removed upon the implementation of the revised VAT. Accordingly, the 7.5% PAL on fuel and the 2.5% PAL imposed on liquefied petroleum gas were to be lifted when the increased 18% VAT came into effect from Monday (1).