The Government has no immediate plans to impose price controls on liquid milk and yoghurt made from locally sourced fresh milk, according to Trade, Commerce, Food Security, and Cooperative Development Minister Wasantha Samarasinghe.

The statement comes after the Value-Added Tax (Amendment) Act No.4 of 2025 – certified on 11 April – exempted these dairy products from VAT. 

However, Samarasinghe said that there were currently no measures in place to enforce price reductions despite the tax relief.

Ministry Secretary K.A. Vimalenthirarajah noted that any decision on price regulation would be premature at this stage.

“Whether price controls are necessary will depend on whether companies pass on the benefits of the VAT exemption to consumers,” he said. 

“If needed, such a decision will fall under the purview of the Ministry of Finance. While our ministry may be consulted, we do not have direct authority over financial matters.”

Under Section 14 of the Consumer Affairs Authority (CAA) Act No.9 of 2003, the CAA has the power to set Maximum Retail Prices (MRPs). 

However, CAA Chairman Hemantha Samarakoon confirmed that there were no immediate plans to impose an MRP on locally produced dairy products.

“We are closely monitoring market trends before making any decisions,” Samarakoon said. 

“Since the VAT exemption is only a week old, we want to observe its impact. If necessary, we will engage stakeholders and consider introducing an MRP at a later stage.”

Samarasinghe warned that if market prices failed to reflect the VAT removal, the ministry may be forced to explore price control mechanisms.