Eateries, restaurants, bakeries not passing on tax relief to consumers – IRD

Many restaurants, roadside eateries and bakeries do not pass on to end consumers the relief afforded to them by recent tax concessions, the Inland Revenue Department (IRD) said today.

IRD Commissioner General Nadun Guruge told reporters this morning that the department has received several complaints from members of the public in this regard.

In late November last year, the Government announced sweeping tax relief measures which included a reduction in Value Added Tax (VAT) from 15 to 8 percent that came into effect on 1 December 2019. According to the IRD chief, however, the benefits of these measures have yet to trickle down to the public, at least as far as dining out is concerned.

“In our inspection tours upon a directive from the President, we found that certain sectors do not pass the benefit of the tax concessions on to customers,” he said.

The IRD’s inspections covered hardware items, ceramics, steel, textiles, hotel/eatery/roadside restaurant and bakery items.

“We learned that some hoteliers (restaurant owners) and bakery item manufacturers do not pass the benefit of VAT and Nation Building Tax (NBT) concessions to their customers,” said Guruge, adding that the IRD will take action against such businesses.

“The benefits of the tax cuts must be experienced by the consumer. We will continue our inspection tours and will take action against any violators under the Inland Revenue Act and the VAT Act,” he said.

The Consumer Affairs Authority (CAA) will also pursue action independent of the IRD, he added.

“Over the next few days, we will call unions and associations representing these traders such as the All Island Bakery Owners’ Association and raise awareness among them, after which we hope they will pass on the concessions to consumers,” said Guruge.





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